Shares in Iluka Resources Ltd (ASX:ILU) fell more than 15% in early trade to a low of A$5.48 after the company announced plans to suspend operations at its Cataby mine in Western Australia from 1 December.
The company also flagged a potential six-month halt to processing at its Synthetic Rutile Kiln 2 (SR2) facility, citing ongoing softness in global demand for mineral sands and related downstream products, particularly pigment.
In a statement to investors, Iluka said the decision was made “given subdued demand for mineral sands and their associated downstream products, particularly pigment”. The company added: “Lower levels of global economic activity continue to weigh on both the purchasing behaviour of customers and their ability to forecast with certainty.”
Iluka extracts chloride ilmenite at Cataby, which is transported to SR2 for processing into synthetic rutile – a high-grade titanium dioxide feedstock used primarily in pigment manufacturing.
The suspension reflects continued challenges across the titanium dioxide sector, which has been grappling with global economic headwinds and reduced industrial activity.
Investors reacted sharply to the operational pause, which raises concerns over near-term earnings and market conditions for key mineral sands products.
Shares are currently down 13.83% at 2pm, trading at $5.57.