Please find attached Ilukas September Quarter Production Report.

Key features:

• September quarter revenue after currency hedging was $209.4 million.
  
  Year-to-date sales revenue was $592.6 million after currency hedging (2009: $300.4 million).
• Zircon production in the September quarter of 126 thousand tonnes
• Year-to-date zircon production was 289.4 thousand tonnes (same period in 2009: 218.7 thousand tonnes).
  
  Iluka has sold more zircon than produced.
• Rutile production in the September quarter of 73.1 thousand tonnes.
  
  Year-to-date rutile production was 186.3 thousand tonnes (same period in 2009: 101.5 thousand tonnes).
  
  While YTD sales are slightly lower, this reflects the timing of shipments, with all rutile volumes contracted.
• Synthetic rutile production of 86.2 million tonnes in the September quarter.
  
  Year-to-date synthetic rutile production of 260.2 thousand tonnes (same period in 2009: 320.7 thousand tonnes).
  
  The lower production reflects Iluka’s decision to idle part of its synthetic rutile capacity in the previous period.
  
  SR sales exceeded production.

Market commentary

• luka achieved a third zircon price increase for 2010, effective from 1 October.
  
  Following this increase, Iluka’s average received zircon price across the Group in the fourth quarter will be above US$1,000/tonne FOB and approximately 30 per cent higher than zircon prices at the end of 2009.
• Zircon demand from customers has remained in excess of the company’s ability to supply, a situation which has led to rationing of volumes across customers and which is expected to continue throughout the fourth quarter.
  
  High-grade titanium dioxide products continue to be in short supply.
• Iluka is supplying rutile and synthetic rutile volumes in accordance with contractual arrangements, most of which expire at the end of 2010.
  
  Iluka is in discussion with major pigment customers (the largest customer segment) regarding allocation of available production volumes for 2011.
  
  

In relation to Appendix 3, Key Physical Information there is a link to a briefing paper which has a flow diagram and explanatory comments.

Ilukas practice is to disclose sales volumes and cash costs of production in the June and December Quarter Production reports, that is those immediately preceding the half and full year results.

I would also remind you about Ilukas Mineral Sands Market briefing sessions planned for Sydney and Melbourne on 9 and 10 November respectively.

These sessions may provide some insight, amongst other things, to titanium dioxide contractual and pricing arrangements for 2011 - the first year of unconstrained pricing for these products.  A reminder notice for these sessions will be sent again shortly.

Ilukas website also has a new Mineral Sands Briefing Paper available - Titanium Metal.

If you have any questions, please contact me.

Regards

Rob