Iluka to restart Capel plant

Iluka Resources has bucked the recent trend in the mining industry by formally announcing the reactivation of its synthetic rutile plant at Capel and the recruitment of up to 150 staff.

The mineral sands miner announced previously flagged plans this morning to restart production at its synthetic rutile kiln 2 (SR2) in April following the restart of mining operations at Tutunup South in the South West, which provides feedstock for the kiln.

The kiln was put on care and maintenance in March 2013 because of weak prices for its product.

Iluka has since been selling synthetic rutile from inventories of finished product.

The company said the kiln, which is capable of producing 200,000 tonnes of synthetic rutile annually, could be reactivated with minimal capital expenditure.

"Approximately 80 employees and 70 contractors have been, or will be, recruited to support Tutunup South mine restart and the SR 2 kiln reactivation," the company said in a statement.

Managing director David Robb said Iluka could reactivate further synthetic rutile capacity as and when market demand and commercial conditions were appropriate.

In another sign of Iluka's growing confidence in the outlook for is mineral sands products, the company is also edging closer to giving the green light to its Cataby project, 170km north of Perth.

Mr Robb said feasibility studies had shown it had met internal financial return hurdles.

Shares in Iluka were off five cents to $7.65 at 8.45am.