ILUKA RESOURCES LIMITED — Investor Presentation 2012

May 15, 2012

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Iluka Resources Limited Bank of America Merrill Lynch Global Metals, Mining and Steel Conference David Robb – Managing Director and CEO 16 May 2012

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Disclaimer

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Forward-looking Statements

This presentation contains information that is based on projected and/or estimated expectations, assumptions and outcomes.

These forward-looking statements are subject to a range of risk factors associated, but not exclusive, with potential changes in:

• exchange rate assumptions

• product pricing assumptions

• mine plans and/or resources

• equipment life or capability

• current or new technical challenges

• market conditions

• management decisions

While Iluka has prepared this information based on its current knowledge and understanding and in good faith, there are risks and uncertainties involved which could cause results to differ from projections. Iluka shall not be liable for the correctness and/or accuracy of the information, nor any differences between the information provided and actual outcomes, and furthermore reserves the right to change its projections from time to time.

All currency referred to is Australian denominated unless otherwise indicated.

Non-IFRS Financial Information

This presentation uses non-IFRS financial information including mineral sands EBITDA, mineral sands EBIT, Group EBITDA and Group EBIT which are used to measure both group and operational performance. Non-IFRS measures have not been subject to audit or review.

2011 – Key Features

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• Group EBITDA ~$1.0bn, NPAT and FCF > $0.5bn, ROE > 40%

• Balance sheet = net cash

• 55 cents final dividend (fully franked); 75 cents for full year

• pay out 53% of FCF vs target minimum of 40%

• Excellent production performance within cash cost guidance - integrated and flexible production base

• Transformational marketing outcomes

• step change in zircon and high-grade titanium dioxide prices

• change passed through next layer in value chain

• Net increase in Ore Reserves and Mineral Resources

• Production enhancement options within portfolio evaluated

• Product and technical development advances

Zircon: Attributes and Applications

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Opacity (whiteness)

high refractive index (zircon refracts/reflects white light well)

Resistant

water, chemical & abrasion resistance of glazes due to hardness of zircon

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Opacifier in ceramics

floor & wall tiles | sanitary ware table ware

Temperature stable

low thermal expansion coefficient, high thermal conductivity, high melting point

Non-wetability

against molten metals

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Refractory and foundry

steel / glass production casting of jet turbine engines

Low thermal neutron absorption

increases nuclear reactor efficiency

Inert

corrosion resistant

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Zirconium and metal

nuclear reactor cores / rods heat exchangers

Unique properties

compound derivatives of zircon suitable for diverse industrial and chemical applications

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Zirconia & zirconium-based chemicals

refractories | pigments | abrasives electronics | catalysts | fibre optics

Titanium Dioxide: Attributes and Applications

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Opaque, white and bright

high refractive index (refracts & reflects white light)

UV protection

absorbs UV light energy (transfers to heat) – prevents fading, peeling,

Non toxic

safe for use in foods, cosmetics and pharmaceuticals

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Pigment

paints & coatings plastics | paper

High strength-to-weight ratio

strong as steel but 45% lighter, twice the strength of aluminium important fuel efficiency benefit in aerospace applications

Corrosion resistant

forms an inert protective oxide coating self repairs when mechanically damaged

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Titanium metal

aircraft engines & airframes military | chemical processing & desalination plants | medical sporting equipment

Slag formation

important constituent of welding to shape, hold and protect the weld pool from atmospheric conditions

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Welding flux agent

ship building | fabrication

Nanoparticles

significant research into nanotechnology shows promising new applications for titanium dioxide

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Nano materials

dye-sensitised solar cells Arsenic removal in water treatment

Balanced Product Revenue Mix

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2012 Guidance

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2010 2011 2012 Guidance
36%
36%
~45%
64% 64% ~ 55%
Zircon High-grade TiO2
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• Based on received 2010 and 2011 prices, 2012 sales guidance

• Assumes 2012 beginning prices for full year 2012

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MAC Iron Ore Royalty

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Background

• Mining Area C (MAC) covers part of BHP BIlliton’s iron ore mining operations in WA’s Pilbara region, operated by BHP (85%) under a JV with Itochu and Mistui

• In perpetuity royalty stream

• $88.5 million EBIT contribution in 2011

BHP and Rio Tinto Pilbara Iron Ore Operations

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Outlook

• BHP has stated intentions to increase total iron ore output from its WA Iron Ore Pilbara system to 450mtpa

• MAC is expected to be a significant proportion of this total increase

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Iluka Game Plan

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Sustainability Safety

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• LTIFR reduced by ~65%

• Severity reduced by ~70%

Volume and Margin Trend

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Production Kt $/t
350 2,100
300 1,800
250 1,500
200 1,200
150 900
100 600
50 300
0 0
Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
Zircon Rutile SR Cash cost of production $/t Z/R/SR Sales $/t Z/R/SR
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• 2011 EBITDA margin 65%

• 2011 unit revenue of $1,537/t Z/R/SR

• 2012 guidance

• revenue ~$2300/t Z/R/SR

Mineral Sands and Group EBITDA

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$m
1100
979.3
1000
900
800
700 660.1
600
500
925.9
400
319.2 305.1
639.2
300
200
286.7
250.2
100
0
1H 2011 2H 2011 2011 2010
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• Higher-margin Jacinth-Ambrosia and Murray Basin production

• Higher zircon and high-grade titanium dioxide prices

• • Second half weighted

Mineral Sands EBITDA

Group EBITDA

Operating Cash Flow

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$m
706.2
700
600
493.5
500
400
300
212.7
200
163.6
100
1H 2011 2H 2011 2011 2010
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• Strengthening cash flow trend - increase in realised prices

• $217 million increase in working capital vs Dec 2010

• higher receivables due to higher prices

• higher inventory levels

• just-in-time supply strategy

Note: excludes MAC royalty, exploration, net interest and tax

Net Debt to Net Cash Movement

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ILUKA GROUP NET DEBT - 2011

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$m ILUKA GROUP NET DEBT - 2011
600
90.3
500
706.2 (23.6) (10.9)
400 (12.5)
3.9
300
(142.5) (21.3)
200
(117.0) (3.3) 156.7
100
0
Opening Net Operating MAC Royalty Exploration Interest Tax Capex Asset sales Share Dividends FX on Debt Closing Net
Debt cash flow purchase Cash
(100)
-312.6
(200)
(300)
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(400)

Mineral Sands Market Characteristics

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• Favourable medium-term supply/demand characteristics for both zircon and high-grade TiO2

• Market characteristics not immune to global macro-economic factors

• economic growth, consumer spending, business confidence, credit availability

• Physically small, volatile, direct supplied markets – inventory effects vs underlying demand

• Global supply flows – logistics and supply reliability/security are important

• No significant discoveries since 2004, no equivalent replacements for industry mainstays

• Few high-quality, capital-efficient, quick-response industry supply options

• most projects in early feasibility phase rather than commitment stage

• typically long lead times, increasing resource nationalism risks

• technical risk in project execution, commissioning, ramp-up and product acceptability

Marketing and Supply Evolution

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Qingdao, China
Antwerp, Belgium
Zircon Premium
Zircon - Premium
Castellon, Spain
Zircon Premium
Shanghai, China
Zircon Premium
Rutile
Malaysia
Wilmington, Warehouse/
Delaware distribution hub
Zircon Premium
Xiamen, China
Zircon Premium
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Balanced Geographic Revenue Mix

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2010
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2011
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2012 (Guidance)
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Other
Other Other
China Asia China
China Asia
Asia
North
North America Europe North Europe America
Europe America
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Regional %	2010	2011	2012 Guidance	2012 Guidance
China	25	28	22
North America	25	21	27
Europe	20	29	27
Asia (other)	19	21	23

Iluka Zircon Customers - 2011

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China Customers Other Customers
kt
40
kt
5
4
30
3
2
20
1
0
10
0
1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101 106 111 116 121 126 131
Number of Customers
31 36 41 46 51 56 61 66 71 76 81 86 91 96 101 106 111 116 121 126 131
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India and Middle East Zircon Sales

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Tonnes
60,000
50,000
40,000
30,000
20,000
10,000
0
2003 2004 2005 2006 2007 2008 2009 2010 2011
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Jacinth-Ambrosia Ore Reserve Changes

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HM Jacinth‐Ambrosia Ore Reserve History ‐ HM
Mt
7.00
6.50
0.05 0
6.00 0.68 0.72 0.77 0.75
5.50
6.42 6.37 6.40 6.38
5.00
4.50
4.00
'09 '09 '09 '10 '10 '10 '11 '11 '11 31 Dec '11
Ore Mining Ore Ore Mining Ore Ore Mining Ore Ore
Reserve Depletion Reserve Reserve Depletion Reserve Reserve Depletion Reserve Reserve
Addition Addition Addition
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Opening Balance

Additions

Depletion

Zircon Market Conditions

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• Soft demand period

• evidence of demand recovery across markets

• Europe remains subdued but customer sand stocks almost exhausted

• Iluka has flexed production in line with demand and will hold inventory as needed - inventory held close to customers

• Prices holding

• end 2011 prices ~US$2400/tonne

• 1Q12 prices up ~US$100/tonne

• 2Q12 prices rolled over

• minor supplier/spot prices have moved up

• Major customers supportive of Iluka’s approach

• direct customers now holding low inventory levels of opacifier

• bulk order interest resuming

• Tile producers under inventory and margin pressure --> technology, thrifting

• Iluka remains confident about medium term demand fundamentals

Zircon - Favourable Long Term Dynamics

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Developing Economies >80% of Tile Market

Developing Economies Higher Usage (Intensity) of Tiles

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Top Tile Consumers % Usage of Ceramics as Flooring Type vs other Flooring Types
2010 Total = 9.4 billion sqm tile by Geography
Oceania
Other Europe Africa 0% 23% 74%
5% 6%
5% 52%
5% 49%
EU 9% Other 40%
North 10% Vietnam 33%
America Asia 27%
4% 65% Indonesia
Central-South America 58% India 16% 17% 7% 11% 10%
10% China
World Germany Western Eastern US North Central Japan China Asia Africa
Avg Europe Europe America & Sth Pacific Middle
America East
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Developing Economies Higher GDP Growth

Developing Economies ↑ Proportion of Global GDP Growth

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Tile Consumption and GDP Growth Rates
20% (Top 6 Tile Consumers)
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
China Brazil India Indonesia Iran Vietnam Average
Tile CAGR (2000 - 2010) Real GDP CAGR (2000 - 2010) Real GDP CAGR (2010 - 2020)
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Global GDP Growth Rate (Real)

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5.0%
( CAGR per annum)
4.5%
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
1900-40 1940-60 1960-80 1980-90 1990-00 2000-05 2005-10 2010-15f 2015-20f 2020-25f
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China Urbanisation

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China’s tiered City Structure: 2005 - 2025

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• Number of tier 1 – 3 cities increase from 45 to 147

• • 352 million people relocate to urban areas

• Equivalent to the total population of: – Australia x 16 times – UK x 6 times – US

China Total Floor Space

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• By 2025, total urban residential floor space may be double that of 2010 level

• Social housing is expected to account for 32% of the total floor space completed between 2011 to 2015

China Urban Floor Space per Capita

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US 2010: 73sqm/urban capita Taiwan 2008: 43sqm/urban capita

• Although total urban residential floor space may double by 2025, China urban residential floor space per capita will still be low

• By 2025, China urban residential floor space per capita will be equivalent to:

• Taiwan in 2008

• • 60% of US in 2010

Short Term Cycles versus Long Term Trend

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China
Growth % GDP and Industrial Production
25
20
15
10
5
0
China: Industrial Production Growth China: Real GDP Growth
5 per. Mov. Avg. (China: Industrial Production Growth) 5 per. Mov. Avg. (China: Real GDP Growth)
Linear (China: Real GDP Growth)
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
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Other Zircon Consuming Countries
Real GDP Growth
Growth %
8
7
6
5
4
3
2
1
-
(1)
(2)
OZCC Total : Real GDP Grow th
(3) 5 per. Mov. Avg. (OZCC Total : Real GDP Grow th)
Linear (OZCC Total : Real GDP Grow th)
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
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United States Europe
GDP and Industrial Production GDP and Industrial Production
Growth %
Growth %
10
10
5
5
0 0
United States: Industrial Production Growth
-5 United States: Real GDP Growth -5
5 per. Mov. Avg. (United States: Industrial Production Growth) Europe: Industrial Production Growth
5 per. Mov. Avg. (United States: Real GDP Growth) Europe: Real GDP Growth
Linear (United States: Industrial Production Growth) 5 per. Mov. Avg. (Europe: Industrial Production Growth)
-10 -10 5 per. Mov. Avg. (Europe: Real GDP Growth)
Linear (Europe: Real GDP Growth)
25
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
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Global Zircon Consumption

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Zircon Sales

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kt
600 ∆
∆ ∆ 7% ∆
?%
34% 115% 515
500 481 479 ?
∆
-22%
∆
384 387 -7% 400
400 378 369
359
327
316
300 ∆
-54%
223
200
100
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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Source: TZMI, Iluka. Iluka sales exclude CRL.

Pigment Demand Intensity - Linked to GDP Growth

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Kgs per Capita
7.0
USA
6.0
5.0
4.0
Europe
3.0
2.0
1.0
China
0.0
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000
GDP per Capita (US$; real 1990 terms; at PPP)
Europe (1993-2010) China (1993-2010) USA (1993-2010)
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• Developing countries’ intensity of pigment use (pigment per person) is expected to grow with rising living standards (GDP/capita)

• Developed countries show an intensity of pigment use ~1.5 – 4kg per person. This level of pigment use in China would be a

Titanium Dioxide Market Conditions

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• Evidence of sustained feedstock cost flow through

• next challenge further downstream (e.g. paint manufacturers/retailers)

• painting season impact in 2Q/3Q 2012

• First half prices ~US$2400/tonne for rutile, ~US$2050/tonne for synthetic rutile

• spot prices above these levels in niche markets

• many competitor legacy/emergent contracts below these levels still

• Chloride vs sulphate margins shifting, dependent on supply position

• strong ilmenite prices

• new Iluka SR products + more on way = processing + marketing flexibility

• balance between contract flexibility and supply/offtake security

• 2nd synthetic rutile kiln re-activated, 3rd planned for Q4 2012 - options for 4[th ] kiln reactivation under consideration

Mineral Sands – Principal Product Streams

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Global Mineral Sands Market

Demand (Mt)

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Titanium Feedstocks
1 2011 = 6.7Mt
1.00 100%
Rutile (95% TiO2 )
0.90 90%
Synthetic Rutile (SR) (90 - 95% TiO2 )
0.80 80% Upgraded Chloride Slag (UGS) (95% TiO2 )
Chloride Market
0.70 70%
=3.6Mt
Chloride Slag (80 - 90% TiO2 )
0.60 60%
0.50 50% Chloride Ilmenite and Leucoxene (60 - 70% TiO2 )
0.40 40%
Zircon
0.30 2011 = 1.4Mt 30%
Sulphate Slag and Ilmenite (50 - 80% TiO2 ) Sulphate Market
0.20 20% =3.1Mt
0.10 10%
‐ 0%
1
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Source: TZMI

Enhanced Production Project

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• Multiple organic production enhancement options

• extensive and, in aggregate, significant

• predominantly brownfield opportunities

• all located in Australia or United States

• Several large projects in PFS/DFS progressing well - Balranald, Cataby, Aurelian

• Scoping studies for Eucla Basin “hub” deposits

• Atacama, Typhoon, Tripitaka (and now potentially Sonoran)

• project to investigate the expansion of concentrator capacity for Eucla Basin

• Aurelian Springs project, near Virginia operations, in fast track PFS

• chloride ilmenite project

• potential economic life of ~10 years

Enhanced Production Potential

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• Potential to increase production and/or extend current production levels significantly

Subject to caveats and disclaimers detailed on slide 2 and in November 2011 Mineral Sands presentation

• Production potential is predominantly based on a combination of Proved and Probable Ore Reserves and Measured and Indicated Mineral Resources that have been subjected to project studies (Enhanced Production Project) using Iluka’s long-term cost and pricing estimates and an assessment of risk, including access,

Murray Basin Mine Move

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• Concentrate produced ahead of schedule, cost in line with budget

• Rutile dominant deposit; ilmenite stream expected to be commercialised

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Exploration Expenditure

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A$m 40 35 30 25 20 15 10 5 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Exploration Focus Areas – South Australia

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2011 areas of drilling
2012 areas of drilling
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2012 Areas of Focus

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• Operate safely and in a sustainable manner

• Navigate short-term market volatility - defend margins, capture opportunities

• Pursue capital-efficient, cost-competitive and disciplined supply enhancement options - in the context of favourable medium-term market dynamics

• Continue to evolve marketing and logistics approach

• security, consistency, fast response

• initiatives to enhance product recognition and consumer preference

• Create shareholder value from product and technical development

• Increase exploration activity in existing provinces and expand to new provinces

• Maintain prudent balance sheet

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Iluka Resources Limited

For further information, please contact:

Robert Porter

General Manager, Investor Relations robert.porter@iluka.com +61 3 9600 0807 / +61 (0) 407 391 829

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www.iluka.com