Iluka Resources is another company battening down the hatches by withdrawing its 2020 guidance and suspending plans to de-merge its lucrative iron ore royalty business.
Iluka said the decision to withdraw guidance was because of the potential for the coronavirus pandemic to create further end-user uncertainty.
At the same time, the company has put a hold on the demerger of its royalty on BHP’s Area C iron ore project in Western Australia.
During the company’s virtual annual general meeting on Monday, CEO Tom O’Leary said Iluka intends to undertake the royalty business demerger during 2020 but did not give any updates to the timeline.
“The demerger will proceed when it is practicable to do so, and the company will update the market in due course,” O’Leary said.
Woolworths is another company that has deferred a planned demerger – this time of its Endeavour dr\inks business.
O’Leary said Iluka had the balance sheet strength to endure a global downturn with no debt and undrawn facilities of $A519 million.
In addition to withdrawing guidance, Iluka has also followed other companies in cutting expansion and investment spending.
Work on some aspects of Iluka’s project development portfolio has been trimmed in the short term due to restrictions on the movement of people.
Mining trials at the Balranald project in NSW and the Sembehun project in Sierra Leone have been deferred from their original timetable of the first half of 2020.
And the completion of preliminary feasibility studies for the Wimmera project and the Atacama project in South Australia have been pushed back to 2021.
However, Iluka says it expects first sales from the Eneabba project in WA in the third quarter as the commissioning of phase one of the mineral sands recovery project was able to continue, despite the strains caused by the virus and widespread shutdowns and social distancing rules.
Iluka shares eased 0.3% to close at $7.71.