ILUKA RESOURCES LIMITED — Interim / Quarterly Report 2005

Oct 19, 2005

Notice to the Australian Stock Exchange

20 October 2005

SEPTEMBER QUARTER 2005 PRODUCTION REPORT

Iluka Group production and sales for the quarter ended September 30 2005 and vear to date are summarised in the following table.

Product (tonnes)	Quarter 3 2005	Quarter 3 2002	Year to date 2005	Year to date 2004
Rutile
production	46,753	39,692	133,676	107,639
sales	27,222	28,136	116,346	100,657
Syn Rutile
production	138,113	110,018	407,704	349,147
sales	117,472	138,877	357,993	340,353
Ilmenite
production 1	416,867	377,502	1,247,712	1,037,736
sales	165,960	187,915	574,139	525,290
Zircon
production	103,146	105,985	312,647	321,164
sales	93,494	104,675	301,711	311,432
Leucoxene/Hyti
production 2	3,434	2,727	10,645	8,547
sales $3$	21,462	13,440	55,358	37,582
Coal
production	296,225	270,776	860,387	792,715
sales	296,017	265,179	860,749	793,497

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

Group production of ilmenite, synthetic rutile (SR), rutile, leucoxene/Hyti and coal increased in the third quarter of 2005, compared with the corresponding period in 2004. Zircon production was slightly lower compared with the corresponding period in 2004.

On a year to date basis, production of ilmenite, SR, rutile, leucoxene/Hyti and coal were higher compared with the corresponding nine months in 2004. Lower year to date zircon production reflects declining zircon grades at Eneabba, which was offset to some extent by higher zircon production from Iluka's other operations.

Group Sales (expressed in tonnes)

Group sales of coal and leucoxene/Hyti were higher in the third quarter of 2005, compared with the corresponding period in 2004. Sales of ilmenite, SR, rutile and zircon were all lower compared with the corresponding period in 2004. This mainly reflects timing differences in shipments as underlying demand for all products remained strong during the quarter. It also reflects the disruption to ilmenite sales as a result of Hurricane Katrina in the USA.

On a year to date basis, Group sales of mineral sands products (apart from zircon) and coal were higher compared with the corresponding nine months in 2004. Higher year to date sales reflect increased production levels for most products and stronger demand for all products. In the case of zircon, the decrease in year to date sales reflects lower production levels and low inventory levels.

As in previous years, fourth quarter sales are expected to remain very strong for most products. The exception is that approximately 80,000 tonnes of ilmenite sales to DuPont's titanium pigment plant at DeLisle USA, are likely to be deferred until 2006. This is due to the temporary closure of DuPont's plant following Hurricane Katrina. The Company remains fully sold for all other products and inventory levels remain very low.

Product (tonnes)	Quarter 3	Quarter 3	Year to date	Year to date
& Location	2005	PADRES	2005)	2004
Rutile
WA.	18,421	17,882	54,908	47,723
USA	7,609	5,475	21,521	15,662
Syn Rutile
WA	138,113	110,018	407,704	349,147
Ilmenite $1$
WA 2	289,188	255,353	865,169	705,733
USA	80,117	88,003	257,202	237,219
Zircon
WA.	63,744	69,172	195,173	215,884
USA	22,792	25,800	74,267	73,492
Hyti 91
WA	3,434	2,727	10,645	8,547
Coal
$NSW^3$	296,225	270,776	860,387	792,715

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

Notes

1 Imenite includes Hyti 70 in WA and Leucoxene in the USA.

2 WA Ilmenite production includes ilmenite used to manufacture SR

3 NSW refers to Iluka's 50% interest in the Narama Coal Joint Venture.

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 13 October 2005).

Product (tonnes)	M inacas 94865	Olarieris 罗尔拉恩	Year to date PINING	Year to cate PINES
Rutile	20.723	16.335	57.247	44,254
Ilmenite	47,562	34.146	125,330	94.784
Zircon	16.610	11.013	43.207	31,788

Review of Regional Performance in the Ouarter

WA

Apart from zircon, production levels for all products increased in the third quarter of 2005, compared with the previous corresponding quarter.

The most notable increase was SR production, which reflects a full quarter of production from the four SR kilns. The corresponding period in 2004 was impacted by a scheduled maintenance shutdown on synthetic rutile kiln four (SR4), at Narngulu. The decrease in zircon production reflects the decline in zircon grades at Eneabba, which was partially offset by increased production from Capel and the processing of tailings material at Narngulu.

Fourth quarter SR production will be approximately 12,000 tonnes lower due to a maintenance shutdown on SR2, at North Capel. A shutdown scheduled for the first quarter of 2006, has been brought forward to the end of November 2005. As year to date SR production is well ahead of plan, the shutdown is not expected to have a material impact on production, nor is it expected to have any impact on scheduled sales.

LISA

Production of ilmenite and zircon was lower in the third quarter of 2005, compared with the previous corresponding quarter. This was mainly due to lower throughput at the dry mill in Virginia as a result of equipment problems, which have since been resolved. Rutile production was slightly higher as a result of the improved operational performance in Florida/Georgia.

OLD

Production levels for all products were higher in the third quarter of 2005, compared with the previous corresponding quarter. The increase in production was primarily due to a strong mining performance in the second quarter of 2005, which flowed through to dry mill production in the third quarter. Actual mine production in the third quarter was impacted by sub-economic grade ore being mined during the final part of the transition into the main Enterprise ore body. Commercial production from Enterprise is expected to commence during the final quarter of 2005, at which time grades are expected to improve.

NSW

Coal production and sales increased in the third quarter of 2005, compared with the previous corresponding quarter. The increase was mainly due to the revised supply contract which provides for increased production and sales tonnages.

	ouartens 医面周	[аданкерия pina l	Wear to date 2005	Near to date рлогі
Sales Revenue
WA	134.6	151.8	434.7	431.8
USA	31.3	31.9	102.6	90.0
Qld	24.4	18.5	81.0	56.5
NSW	9.6	8.6	28.1	25.5
Total (A\$m)	199.9	210.8	646.4	603.8
Capex (A\$m)	110.3	37.8	283.1	140.8
Exploration (A\$m)	6.1	3.9	15.3	9.7

Iluka's sales revenue, capital and exploration expenditure for the quarter and year to date are 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.

Douglas Project Progress Report at 30 September 2005

General Overview

At the end of September, the overall project was approximately 72% complete and cumulative expenditure was A\$216 million* against the overall project budget of A\$270 million

Roche Mining has updated their advice on target completion dates for the EPC contract (valued at approximately \$200 million):

• Wet Concentrator Plant practical completion between 20 to 30 November 2005, following the completion of wet commissioning activities; and
• Mineral Separation Plant practical completion by 20 March 2006 (following the completion of initial commissioning activities), although this is subject to a progress review by Roche Minina.

Achievements in the September Ouarter

Douglas Mine Site

• mining activities well advanced with 500,000 tonnes of ore stockpiled adjacent to the mining unit plant (MUP);
• dry commissioning of the MUP completed:
• dry commissioning of the wet concentrator plant commenced; and
• on site fresh water dam substantially filled and ready for operations.

Mineral Separation Plant

• key building structures (feed preparation building and wet circuit building) essentially complete;
• erection of building switch rooms completed:
• installation of structural steelwork for the tank farm and dry mill well advanced:
• key processing equipment installed with piping and electrical fit out underway;
• steel cladding of the workshop, warehouse, laboratory and feed preparation buildings underway; and
• installation of mechanical equipment to the acid neutralisation area, tank farm, heavy mineral feed receival station and zircon polishing area underway.

Outlook

A sustainable improvement in productivity rates over the next few months is required to meet the target completion date for the mineral separation plant (MSP). If the improvement in productivity is not realised, Roche's completion date for the MSP may be delaved to around mid-2006.

*Capital expenditure of A\$216 million is derived on a cash basis and excludes accruals.

2005 Full Year Earnings Guidance

The Company's previous 2005 full year earnings guidance of an expected net profit after tax (NPAT) result of between A\$130 and A\$140 million remains unchanged. The guidance is based on an average spot exchange rate of 77 cents for the year. It also includes a NPAT contribution of approximately A\$20 million from two asset sales in the second half of 2005.

Mike Folwell Managing Director and CEO