Iluka Suspends Operations, Axes 33 Jobs

Iluka Suspends Operations, Axes 33 Jobs

Mining Operations suspended until prices recover.

Iluka Resources have announced that they'll be suspending South Australian mining operations for up to two years. The decision was made in the face of a downturn in global demand for zircon over the past 24 months.

The job losses are at the Jacinth-Ambrosia mine, which is on the Eyre Peninsula near Ceduna. At peak production, this facility alone can supply up to 30% of the world's zircon needs.

Robert Porter, General Manager of Iluka Resources Corporate Affairs, said, "We supply zircon globally and, as with other mineral commodities, demand has been affected by global economic conditions and global uncertainty."

"Our European market ... has been a large consumer of zircon for domestic-based applications. That clearly has been a subdued market for a period of time."

According to Robert, a halt on mineral sand mining would result in one-off savings that would help the company consolidate any lost revenue during the downtown.

"There's been some weakness in Asia and India. China utilises zircon both in the building industry and in a range of other applications, so there's really a plethora of end demand market factors, which have meant demand has been running at a lower-than-historical run rate."

Jobs are the first on the chopping block in response to the downturn. "We have to adjust our production accordingly. That regrettably results in the reduction of the workforce."

46 workers will hang onto their jobs, either on site or elsewhere. The layoffs mean that Iluka can continue operations, rather than mothballing the facility entirely. Iluka will continue to meet its obligations towards the South Australian government in regards to mining royalty payments.

There are further job losses on the horizon as support services, including contractors, are reduced due to lowered production.

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Sources: ABC News, SBS

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