ILU - Iluka Resources

[divs4ever]

If you think there's anything in 'fractals', Iluka has an interesting one to muse on. Let me take you back to the double top of 2011-12.
Using the grid given, rather than dollars and cents, count up from the trough to the tops = 3 levels roughly.
Now count 3 levels down from the trough. That's where it eventually went but it took 4 years.
After the initial plunging descent the stock's price staged a 1 year rally but the decline was not over.
Tranferring this analogue to today, ILU might be due for a rally that splutters out after a decent run and then the decline resumes towards its destination - 4 or 5 bucks. Or not - just one scenario.

Not Held

MONTHLY All Data
View attachment 167297

on a different forum ( no longer with us ) some claimed ILU was a nice little swing trade for those that have talent

but am thinking $6,25 to $6 , might be tempting for a SMALL top up ( but am quite willing to wait for a $5 handle )

ILU needs industry to recover .. is industry recovering ( maybe not )

 

[finicky]

@divs4ever yes I'm not anticipating a rally yet - edited "might be due for a rally" to might get one.
Maybe down to $6-$5 first using the 2011 'analogue'? I'm not following the fundamentals at all closely. I'd like to get on for the rare earth's project but don't like being reliant on China for the zircon. Also I like the record of management to the limited extent I've looked into it. That in specie distribution of Deterra was fantastic.

Not Held

 

[divs4ever]

@divs4ever yes I'm not anticipating a rally yet - edited "might be due for a rally" to might get one.
Maybe down to $6-$5 first using the 2011 'analogue'? I'm not following the fundamentals at all closely. I'd like to get on for the rare earth's project but don't like being reliant on China for the zircon. Also I like the record of management to the limited extent I've looked into it. That in specie distribution of Deterra was fantastic.

Not Held

the DRR one yes , the SRX one looks like a patience tester

but SRX and IU seems to be missing expectations for various reasons , add in 'bumpy divs. ( for ILU ) and some holders will get nervous from time to time

DIVIDEND TYPE	DIVIDEND AMOUNT ($)	FRANKED	EX-DIV DATE	PAY DATE
Interim	0.030	100.00%	01/09/2023	27/09/2023
Final	0.200	100.00%	06/03/2023	30/03/2023
Interim	0.250	100.00%	05/09/2022	30/09/2022
Final	0.120	100.00%	08/03/2022	07/04/2022
Interim	0.120	100.00%	07/09/2021	06/10/2021
Final	0.020	100.00%	09/03/2021	08/04/2021
Final	0.080	100.00%	05/03/2020	02/04/2020
Interim	0.050	100.00%	04/09/2019	02/10/2019
Final	0.190	100.00%	07/03/2019	04/04/2019
Interim	0.100	100.00%	30/08/2018	27/09/2018
Final	0.250	100.00%	27/03/2018	23/04/2018

not smooth enough for most ( income ) investors , more for the investor hoping for growth in the future ( and some divs./franking ) , a stocking stuffer perhaps ??

although i love my divs i also need some growth to resist inflation

 

[So_Cynical]

Iluka looking cheap once again, this stock often has big multi year share price swings, simple formula - buy cheap and collect dividends, Franking credits for a few years then sell for a lot more than you paid for it, sand is good business and the SP is close to back where it was pre Deterra. allowing for inflation the SP is probably about where it should be.
~

 

[Dona Ferentes]

The dilemma of when does a falling price become an opportunity.
I’ll be interested in the next qtly’s statements regarding Zircon stockpiling and its effects on the balance sheet.

quarterly out.
.
and will the shorters move on?

 

[houtman]

quarterly out.
.
and will the shorters move on?

Zircon production 54.7kt, Sales 23.5kt - looks like still stockpiling due to market conditions.

SR1 rutile/titanium plant to remain off line due to market conditions.

Net cash June 23 - $343m
Dec 23 - $225m

Not a great review i my opinion, unless I'm missing something.

 

[Sean K]

Iluka looking cheap once again, this stock often has big multi year share price swings, simple formula - buy cheap and collect dividends, Franking credits for a few years then sell for a lot more than you paid for it, sand is good business and the SP is close to back where it was pre Deterra. allowing for inflation the SP is probably about where it should be.
~
View attachment 168318

I think you've picked this in the 2024 comp. Maybe a turn around story this year.

 

[divs4ever]

I think you've picked this in the 2024 comp. Maybe a turn around story this year.

heavy industry ( in the developed world ) seems to be contracting , i see the tunnel but not even an oncoming train

they try to run a solid business , but i think they will continue to struggle all year ( and continue to stockpile ready for processing )

( i hold ILU , and am willing to nibble in the dips and currently have an order in sub $6 )

 

[finicky]

Iluka boss warns Chinese rare earth domination will leave Western economies vulnerable​

The boss of Iluka Resources has warned China’s near-monopoly of the rare earth industry is a threat to Western economies and defence

Iluka Resources boss Tom O’Leary has warned China is weaponising its domination of the rare earth market, driving down prices to keep alternative sources out of the market while buying up access to deposits in Australia.
Speaking at Iluka’s annual shareholder meeting in Perth on Tuesday, Mr O’Leary said Chinese state-owned entities had a “pervasive” influence on pricing for rare earth metals, and were prepared to wear a loss to keep other producers out of global markets.

“China’s dominance of the rare earths industry, which in the case of heavy rare earths is near-total, is achieved through production supremacy and its influence over pricing,” he told shareholders.

Iluka is building its own rare earth refinery at its former Eneabba minerals sands mine in the Mid West of WA, but is still in negotiations with the federal government over an extension to its $1.25bn lending facility from the government’s Critical Minerals Facility, needed to cover a construction blowout which will take the plant’s cost to as much as $1.8bn.

Mr O’Leary pointed to the Chinese government’s decision in December to ban the export of knowledge and technology related to the complex chemistry needed to turn rare earth deposits into metals, saying the move was a clear indication of China’s intent to maintain its industry dominance — both for commercial and defence purposes.

“In addition to being essential for the production of electric vehicles and wind turbines, the key heavy rare earths, dysprosium and terbium, have critical applications in defence and national security,” he said.

 

[finicky]

I can't get the whole article above to remain in the post but true to form, the CCP government is suppressing the global prices of rare earths even at the cost of some of its own mines/processors operating at a loss. This is increasing its stranglehold, as it is moving in on distressed western developers and buying ownership or offtake agreements from them on the cheap. Meanwhile it has placed an embargo on the export of any China rare earths refining technology.

https://www.theaustralian.com.au/business/mining-energy/iluka-boss-warns-chinese-rare-earth-domination-will-leave-western-economies-vulnerable/news-story/c4d20ec6e653d64cb45dbcfe355f7687

 

[divs4ever]

Iluka boss warns Chinese rare earth domination will leave Western economies vulnerable​

The boss of Iluka Resources has warned China’s near-monopoly of the rare earth industry is a threat to Western economies and defence

Iluka Resources boss Tom O’Leary has warned China is weaponising its domination of the rare earth market, driving down prices to keep alternative sources out of the market while buying up access to deposits in Australia.
Speaking at Iluka’s annual shareholder meeting in Perth on Tuesday, Mr O’Leary said Chinese state-owned entities had a “pervasive” influence on pricing for rare earth metals, and were prepared to wear a loss to keep other producers out of global markets.

“China’s dominance of the rare earths industry, which in the case of heavy rare earths is near-total, is achieved through production supremacy and its influence over pricing,” he told shareholders.

Iluka is building its own rare earth refinery at its former Eneabba minerals sands mine in the Mid West of WA, but is still in negotiations with the federal government over an extension to its $1.25bn lending facility from the government’s Critical Minerals Facility, needed to cover a construction blowout which will take the plant’s cost to as much as $1.8bn.

Mr O’Leary pointed to the Chinese government’s decision in December to ban the export of knowledge and technology related to the complex chemistry needed to turn rare earth deposits into metals, saying the move was a clear indication of China’s intent to maintain its industry dominance — both for commercial and defence purposes.

“In addition to being essential for the production of electric vehicles and wind turbines, the key heavy rare earths, dysprosium and terbium, have critical applications in defence and national security,” he said.

well several western nations outsourced the processing to China because it was 'dirty and dangerous ( and i assume expensive )since there is a widening rift between China and certain nations , why would China export hard-learned technology to 'unfriendly nations '

those nations will either do the hard research themselves or use cheaper , less efficient substitutes

 

[finicky]

why would China export hard-learned technology to 'unfriendly nations '

Maybe as quid pro quo for all the tech that they've been given or stolen from us.

 

[divs4ever]

Maybe as quid pro quo for all the tech that they've been given or stolen from us.

yes gunpowder and tea for a starter

but much of the Chinese acquired tech was acquired via tax-dodging Western nations
the Chinese have very long memories and now they are a major economy ( maybe even the next major hegemony )

how did they manage it , by being the 'sweatshop of the world ' watch India grow to become the major Chinese competitor ( for much the same reasons )

 

[rcw1]

Good evening,​

Not the first time China has targeted monopolization of the REE market. Holding all the cards, why wouldn't you attempt to wipe out all opposition, moreover, attempt to discredit through outrageous hurtful media comments and spin and invest into Western companies which had been identified as REE producers. All Chinese propaganda. They are extremely good at it.

Countries that require REE mostly for military purposes are working towards reducing their reliance upon China. They don't want to deal with China no more. This is a given, but independent REE reliance is years away, although it will happen. Arguably LYC is probably best placed at the minute. The technologies and factories to harvest heavy RRE remains, at the minute, only within China. Knowledge and the infrastructure to isolate heavy REE provides the key to military grade use without Chinese reliance.

Kind regards
rcw1

​

Iluka boss calls out China’s infiltration of rare earths in Australia​

Brad Thompson AFR Reporter
Updated May 7, 2024 – 5.00pm,first published at 4.47pm

Iluka Resources managing director Tom O’Leary has accused China of rigging rare earths prices so that producers cannot make money, as it tries to advance its grip on the world’s mineral deposits. Mr O’Leary said there were clear efforts by Chinese state-owned entities to control rare earths deposits and production, including in Western Australia and Victoria.

“This is taking place via a number of binding offtake agreements with various companies, and via ownership, as in the well documented case of Northern Minerals,” he said. Northern Minerals sought a foreign investment probe of its own shareholder, Chinese businessman Wu Tao. Mr O’Leary said the entire industry was unprofitable as China manipulated prices to further its stranglehold on the supply of minerals essential in defence, electronics and the transition away from fossil fuels.

“No participant, regardless of geography, is making any money at today’s prices,” he said. ASX-listed Lynas has previously claimed it was the only profitable producer outside China. Iluka is further convinced pricing provided by Asian Metal indices, which are relied on by producers, is rigged. “Linking prices to the Asian Metals index only further entrenches China’s market power,” he said on Tuesday.

Mr O’Leary’s attack comes amid uncertainty over the future of a part-built rare earths refinery in WA and a protest lodged by the Albanese government over an incident at the weekend involving an Australian navy helicopter and Chinese fighter jet. Iluka is locked in talks with Labor about more taxpayer support to finish building Australia’s first rare earths refinery after a cost blowout taking its price tag up to $1.8 billion. Iluka is building the refinery at Eneabba with $1.25 billion in taxpayer-funded finance.

The company has acknowledged the government is “extremely unlikely” to advance all of the money needed.
The government has made a two-way bet on rare earths by allocating more than $800 million in loans and grants to the Gina Rinehart-backed Arafura Resources and its Nolans project in the Northern Territory.

Iluka said it was under pressure from some shareholders to monetise a stockpile of rare earths material left behind by its mineral sands mining by selling it to China. Selling the stockpile, valued at more than $1 billion and put up as security in return for the current taxpayer backing, would involve unwinding the entire refinery deal between Iluka and the government.

A compromise appears likely, with Mr O’Leary and Iluka chairman Rob Cole telling shareholders at the annual general meeting in Perth on Tuesday they remained confident in the long-term value of diversifying into rare earths. Iluka has no plans to sell its 20 per cent stake in $2.5 billion spin-off Deterra Royalties to help meet the funding shortfall on Eneabba. Mr O’Leary said China’s influence over rare earths went beyond its reach in other critical minerals such as lithium, or even titanium and zircon, which Iluka mines too. “While China is a significant customer of all these commodities, they are all produced in material quantities in countries outside China. For rare earth oxides, China accounts for approximately 90 per cent of all production, and for the key heavy rare earths, effectively 100 per cent.

“It is this monopolistic production, combined with interference in pricing, that is resulting in market failure, and rare earths are among very few metals where China has demonstrated a preparedness to weaponise its control.”

The Australian Financial Review revealed in November that a company accused of covert attempts to gain control of Northern Minerals and its strategically important heavy rare earths project in WA had ties to two Chinese conglomerates.

Lynas Rare Earths boss Amanda Lacaze entertained merger talks with her US equivalent, MP Materials, to create a Western champion in rare earths. She has said only Lynas and China’s Northern Rare Earths were profitable at current market prices.

​

 

[finicky]

For want of anything else to post about I think I'll stick my neck out again regarding the ILU chart.

But first, the shifting capex anticipated for the Eneabba processing plant is insanely high but isn't that the way with RE plants? The strategic importance against the China monopoly might fetch funding relief from government(s) or upstream manufacturers.

Market consensus has the capital cost range for the project between A$1.3 billion and A$1.6 billion, with an average of A$1.5 billion. FEED work undertaken to date indicates the capital cost may be up to 20% above that average.

About the chart, my suggestion back in December 2023 was:

ILU might get a rally that splutters out after a decent run and then the decline resumes towards its destination - 4 or 5 bucks. Or not - just one scenario.

So a rally has occurred in the interim and there are now signs I believe that it is flagging. Can see the big refusal wicks on candles are on the upper edge of the rally. The price is now perilously probing the trend support line. Price has risen as far as the previous level support at 8.0. It's like a retest that might well fail to go higher. There is some failure of a momentum indicator to confirm the rally. I will capitulate if price has a strong weekly close above 8.50.

Not Held
Will risk a buy much lower should the rally fail

WEEKLY

 

[finicky]

Their downside target is higher than mine.
From today's Market Matters 'match out' report after ASX close:

• Iluka (ILU) -0.31% failed to bounce despite Citi upgrading to a buy. We took a small profit on ILU recently and the stock has pulled back sharply – we continue to target $6 on the downside.

Iluka Raised to Buy at Citi; PT A$7.80

Not Held

 

[divs4ever]

i have a 'top up ] order currently in the market and it is a bit lower than $6

but who knows it might still get filled , depending on how far away those REE profits are

 

[finicky]

divs I still think $5 or even $4 is on the cards but I'll be watching for weekly candles that might signal a reversal. There are no such candles yet. I'm taking the tack that it's a double top that is in effect.

 

[divs4ever]

divs I still think $5 or even $4 is on the cards but I'll be watching for weekly candles that might signal a reversal. There are no such candles yet. I'm taking the tack that it's a double top that is in effect.

am not quite down at $5 , but if the downtrend continues .. i can make it so

$4?? well if the economic bubble bursts anything can happen ( and bursting is far from impossible )

 

[DrBourse]

ILU @ $6.18 is down to its lowest point since early Feb 2021.....
$5.49 is abt ILU's next Support Level.....
Hmmmmmm