ILUKA RESOURCES LIMITED — Management Reports 2010

Feb 24, 2010

Australian Securities Exchange Notice

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25 February 2010

2010 - 2013 BUSINESS TRENDS COMMENTARY

Forward Looking Statement

This document contains information which 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. Iluka does not undertake to update the projections provided in this document on a regular basis .

2010-2013 Business Trends

Iluka Resources Limited (“Iluka”) provides the following commentary on expected trends in the Iluka business for the current financial year, as well as an indicative profile in the period 2011-2013. The latter period is expected to be associated with improved economic conditions and confidence globally and therefore more robust demand for mineral sands products. It will also be a period in which Iluka’s production is expected to be predominantly sourced from new assets in the Murray and Eucla Basins.

The information provided should be treated as an indicative guide and not as specific forecasts. All trends and estimates are subject to significant variability, being dependent on economic conditions, market demand and company decisions, as well as other factors.

Iluka may provide more detailed operational trend commentary for the period 2011 to 2013, later in the year, to assist shareholders and analysts model the business. This information will coincide with a change in the manner of financial and production reporting, given that Jacinth-Ambrosia (Eucla Basin) and Western Australia (Perth Basin) will be treated as one cash generating unit, as a consequence of the fact that Jacinth-Ambrosia heavy mineral concentrate (and in future some South-West concentrate) will be processed through the Narngulu mineral processing plant in Western Australia in order to produce a finished product for sale.

Iluka expects 2010 to be a partial recovery year following very weak demand in 2009. Clearly, 2010 and subsequent years will be dependent on the path of global economic recovery and its impact on demand, supply, pricing and currency trends.

Production and Sales

The following provides an indication of expected 2010 sales volumes, assuming both the successful commissioning and ramp up of Iluka’s two new production sources of Murray Basin Stage 2 and JacinthAmbrosia, and a recovery in demand from 2009 levels. Sales volumes are subject to variation dependent on market conditions, and customer shipment schedules. In the period 2011 to 2013 indicative production volumes are provided. It is expected, under usual circumstances, that production and sales will balance over several years, although there may be some inventory build or drawdown based on demand factors and strategic or commercial considerations. In addition, Iluka has the potential to increase production if demand and margin outcomes warrant. It should be noted that while these are annual averages, the profile (for production and sales) may vary year-to year.

Iluka Resources Limited • ABN 34 008 675 018 • Level 23 140 St Georges Terrace Perth WA 6000 GPO Box U1988 Perth WA 6845 • T: +61 8 9360 4700 • F: +61 8 9360 4777 • www.iluka.com

Physical Variables

Product (ktpa)	2006- 2008 Sales Volumes (Average)	2009 Sales Volumes	2010 Sales Volumes (Estimate)	2010 Comments	2011-2013 Production Volumes (Average)	2011-2013 Comments
Zircon	410	220	~400	Expected to be 2 ndhalf weighted. Given that majority of sales are uncontracted (i.e. “spot”), sales levels will be influenced by demand recovery, with risks to bothupside and downside	~500+	Depending on demand, sales could be increased above this level by ~10% given internal capacity and starting inventory
Rutile	125	120	240	Expected to be 2 ndhalf weighted. The majority of forecast sales have been contracted.	~250
Synthetic Rutile	500	390	~300	Assumes operation of 2 kilns in the 1 sthalf, then 1 kiln only as the Mid West SR kiln is idled in the 2 nd half	~290	Based on 2 SR kilns operating, which is planned. A 1 kiln operation would equate to ~190-200kt pa ofSR
Chloride Ilmenite	410	375	290	Reflects reduction in WA mining activities & utilisation of most internally produced ilmenite for upgrading to SR.	~300 1	Lower production/sales than historical levels given focus on ilmenite for internal upgrading to SR

Selected Financials

Category (A$ million pa)	2006-2008 Actual (Average)	2009 Actual	2010 Estimate	2010 Comments	2011-2013 (Average)1
Total Cash Costs of Production	585	453	530	Commencement of operations at Murray Basin Stage 2 and Jacinth-Ambrosia, plus continuing residual Western Australian operations	~510
Depreciation & Amortisation	127	176	~220	Commencement of depreciation for Murray Basin Stage 2 and Jacinth-Ambrosia., plus one-off impacts of changes to asset lives, particularly WA	~175
Capital Expenditure	155	521	100 2	Cessation of spend on majorprojects	~75

1 Based on Iluka’s current 5 year business plan, which is reviewed and updated annually.

2 Forecast capital expenditure for 2010. The major part of cash capital expenditure is expected to be associated with remaining payments for Jacinth-Ambrosia and Murray Basin Stage 2

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Currency Hedging Arrangements

As at 31 December 2009, Iluka had the following currency hedging arrangements in place.

2010 Currency Hedging
January – June 2010	Face Value **US$m **	Average Rate
ForwardsFXContracts	112.0	0.855
Purchased Options	85.0	0.900
July – December 2010
ForwardsFXContracts	41.5	0.874
Purchased Options	150.0	0.900

Investment market and media inquiries Dr Robert Porter General Manager, Investor Relations and Corporate Affairs

Iluka: +61 (0) 8 9360 4700 (Perth Corporate Office) Direct (Melbourne): +61 (3) 9225 5481 Mobile: +61 (0) 407 391 829 Email: robert.porter@iluka.com

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