ILUKA RESOURCES LIMITED — Interim / Quarterly Report 2004

Oct 20, 2004

Notice to the Australian Stock Exchange

21 October 2004

SEPTEMBER OUARTER 2004 PRODUCTION REPORT

Iluka Group production and sales for the quarter ended 30 September 2004 and year to date are summarised in the following table.

Product	Quarter 3	Quarter 3	Year to date	Year to date
(tonnes)	2004	2003	2002	2003
Rutile
production	39,692	32,965	107,639	108,153
sales	28,136	50,644	100,657	127,034
Syn Rutile
production	110,018	117,494	349,147	352,721
sales	138,877	117,486	340,553	317,769
Ilmenite
production 1	377,501	355,961	1,037,736	1,063,735
sales	187,915	164,261	525,290	495,693
Zircon
production	105,985	108,108	321,164	304,529
sales	104,675	78,682	311,432	258,164
Leucoxene/Hyti
production 2	2,727	4,225	8,547	10,565
$\overline{\mathsf{sales}}^3$	13,440	17,071	37,582	34,745
Coai
production	270,776	184,581	792,715	777,291
sales	265,179	265,457	793,497	780,457

Notes

1 Includes ilmenite used to manufacture synthetic rutile

2 Hyti 91 only

3 Sales include Leucoxene, Hyti 91 and Hyti 70

4 Group production and sales numbers include 50% of Narama Coal and 100% of Consolidated Rutile Limited's production and sales

Overview of Group Production and Sales

• Group production of rutile, ilmenite and coal increased in the third quarter of 2004 compared with the corresponding period in 2003. Group production of leucoxene/hyti, SR and zircon were slightly lower. The main factors impacting on production during the period were a major SR maintenance outage, four hurricanes and associated excessively wet weather in Florida/Georgia and lower zircon production at one of the Eneabba mines. These impacts were partially offset by the improved production/processing performance of the CRL and Virginia operations and the north Capel SR plant.
• Group sales of SR, ilmenite and zircon were all significantly higher in the third quarter of $\bullet$ 2004 compared with the corresponding period in 2003. Conversely leucoxene/hyti and coal sales were slightly lower. Rutile sales were significantly lower mainly due to the timing of rutile shipments and to a lesser extent the impact of hurricanes on shipping and rail schedules in Florida/Georgia.

Product (tonnes) & Location	Quarter 3 2002	Quanter 3 2006	Year to date 20021	Yearito date 2008
Rutile
WA	17,882	16,191	47,723	53,275
USA	5,475	6,184	15,662	19,826
Syn Rutile
WA	110,018	117,494	349,147	352,721
$I$ Imenite $^{-1}$
WA	255,353	250,953	705,733	776,302
USA	88,003	69,879	237,219	194,477
Zircon
WA	69,172	83,783	215,884	231,209
USA	25,800	18,017	73,492	50,282
Hyti 91
WA	2,727	4,225	8.547	10,565
Coai
NSW	270,776	184,581	792,715	777,291

Production for the quarter and year to date from each of Iluka's key regional operations are summarised in the following table.

Notec

1 - Ilmenite includes Hyti 70 in WA and Leucoxene in the USA. 2 - NSW refers to Iluka's 50% interest in the Narama Coal Joint Venture. 3 - WA Ilmenite production includes ilmenite used to manufacture SR

Consolidated Rutile Limited production (100%) for the quarter and year to date is summarised in the following table (for more details see CRL's quarterly production report dated 14 October 2004).

	Quarter 3 ∰≄∑tirY.‼	Quarter 3 Marita ka §	YATEOTERO 经国艺期	Manaona a ₩ ≀⊪∎≵
Product (tonnes) Rutile	16.335	10.590	44.254	35.052
Ilmenite	34.146	35.154	94.784	92.981
Zircon	1.013	5.308	31.788	23.039

Review of Regional Performance in the Quarter

WA

Production in the third quarter was underpinned by the mining and processing performance at Eneabba and Narngulu, respectively and the improved performance of the Yoganup West mine. Zircon production was down mainly as a result of lower grades at the Eneabba South mine and SR production was lower due to a 12 week major maintenance outage on the SR4 kiln at Narngulu which was partially offset by the improved performance of the SR operations at north Capel.

USA

Production in the third quarter was underpinned by the continued good performance of the Virginia operations. The Florida/Georgia operations were adversely impacted by weather conditions during the quarter. There were no injuries or equipment damage, or environmental issues however, it was necessary to shutdown mining and processing operations for a total of six days as a precautionary measure during storm conditions. The excessively wet conditions also impacted mining operations and restricted throughput for a period of two weeks in total. The final stages of commissioning of MC2 (Lulaton) operation in Georgia were completed during the quarter.

Old

Higher production volumes were primarily due to the supplementary dry mining of highgrade ore adjacent to the Enterprise and Yarraman dredge paths and the improved performance of Yarraman dredge.

NSW

• Coal production and sales remain in line with full year contractual requirements.

	Quanter 3 DATAY	Quarter's PITTER	Year to date 2004	Yeanio date 2003
Sales Revenue
WA	151.8	144.5	431.8	407.7
USA	31.9	25.2	90.0	75.7
Qld	18.5	15.2	56.5	43.9
NSW	8.6	8.5	25.5	24.8
Total (A\$m)	210.8	193.4	603.8	552.1
Capex (A\$m)	37.8	39.1	140.8	94.1
Exploration (A\$m)	3.9	2.8	9.7	8.6

Iluka's sales revenue, capital and exploration expenditure for the quarter and year to date is summarised in the following table.

Notes

All revenues shown include any hedging gains and are based on 50% of Narama Coal and 100% of Consolidated Rutile Limited's revenues. Exploration is shown as cash expenditure. All financials remain subject to audit confirmation.

Exploration Results and Highlights

• Commenced drilling in the Murray Basin at Euston (NSW) to test aeromagnetic anomalies and infill resource drilling of known strand lines. Resource definition drilling was completed at Ouven for the KWR deposits including additional sampling for assemblage data.
• Drilling for resource extensions at Eneabba intersected encouraging zircon enriched $\bullet$ mineralisation adiacent to operating mines.
• Work on the Atlantic coastal plain in the USA concentrated on identifying resource $\bullet$ extensions at Old Hickory, Virginia, Lulaton, Georgia and the existing operations at Green Cove Springs, Florida.
• The second phase of reconnaissance drilling commenced in the Eucla Basin. SA in the $\bullet$ Ooldea Range region. Follow up drilling of Geopeko hole EB119 intersected encouraging grades of heavy minerals with a zircon rich assemblage.
• Drilling Activity
• $\circ$ Perth Basin 25.363 metres
• o Murray Basin $-24.149$ metres
• $\circ$ Eucla Basin 6,978 metres
• $\circ$ Canning Basin 2,814 metres
• $O$ USA 7.024 metres
• Tenement Relinguishments
• o WA E70/1620 Metricup. M70/447 Gingin and E70/2137 Capel
• Tenement applications
• o WA Mining Lease Cataby and EL 70/2699 North Capel
• SA ELA 656/04 Eucla Basin $\sim$

Mike Folwell Managing Director and CEO