Main Components of Result

1^st Half

2009

Comments

Mineral Sands Sales Volumes (total) �down 51.7%

Mineral Sands revenue (after hedging) �down 62.4%

450kt

$149m

Significantly lower total volumes especially high value zircon


Lower sales volumes/revenues meant that substantially all of the group�s revenue was hedged at an average rate of USD 0.856, which partially offset the benefit of lower average spot exchange rates

Cash costs of production �up 5.2%

$(281)m

Higher operation of SR kilns vs previous period; higher Murray Basin transport & overburden removal costs. Benefits of asset reconfiguration expected to be reflected in lower cash expenditures from 2H 09

Inventory movement

+$187m

Reflects significantly lower sales volumes of higher value products – with finished goods/work in progress in inventory

Restructure and idle capacity cash charges

(16.1)

Costs associated with production curtailments, retrenchments (esp in WA) �response to GEC

Mineral Sands EBITDA �up $23m

66.3

Depreciation and amortisation up up $10.5m

(83.5)

Includes $4m for accelerated depreciation for SR kiln idled in Mid West, Brink Virginia depreciation commencement

Mineral Sands EBIT

(17.2)

Mining Area C �up 14.9%

31.7

$8m capacity payments; royalties based on sales of 19.5MDMT; average realised price unchanged

Corporate and other costs �up  $4.5m

(16.9)

Includes $3.7m legal and other costs for Roche dispute; corporate overhead review expected to result in at least $5m in cost savings, with additional savings in regional overhead structures

Group EBIT before significant items

(41.6)

Significant non-cash items

(67.6)

Charge pre tax write off of fair value of lower value Mid West & Murray Basin deposits now not to be mined, esp given higher margin Jacinth-Ambrosia zircon HMC stream. Post tax - $47.3m

Net interest costs

(6.5)

Note: majority of capital expended on new projects with interest capitalisated until production commencement

Interest capitalisation (Jacinth-Ambrosia &  Murray Basin 2)

5.9

Loss before tax

(117.6)

Tax benefit

38.7

Tax benefit attributable to loss in Aust & US 20% corporate tax rate – see 4D page 6

Loss from continuing operations

(78.9)

Profit from discontinued operations (CRL )

23.3

Sale of Iluka�s 51% interest in CRL

Profit / (loss) for the period

(56.0)

Net Profit After Tax

(55.8)