Iluka Resources plans to put its Hamilton mineral separation plant in Victoria on care and maintenance status resulting in an $150 million pre-tax impairment charge in its half-year accounts.
The mineral sands miner will also record redundancy and restructure costs of $14 million in the half-year results, with the plant expected to suspend operations in October 2017.
The company also flagged its intention to restart mining at the Jacinth-Ambrosia operation in South Australia by December, as it sees improving conditions in the zircon market.
"Iluka continues to be encouraged by the improvement in mineral sands markets. The restart of J-A reflects the continued tightening of the zircon market and follows the substantial drawdown on inventory over 2017," Managing Director Tom O'Leary said.
Operations at Jacinth-Ambrosia, which is Iluka's main source of zircon, were suspended in April 2016 for an 18-24 month period to allow a drawdown of heavy mineral concentrate amid subdued market demand.
Iluka said restart costs will be around $7 million, while cash production costs are expected to be about $6 million in 2017, and it will hire 40 employees and 60 contractors to support the operation.
Iluka is the world's biggest producer of zircon, used in ceramic products, as well as a major supplier of paint ingredient rutile.
The company has eased production in recent years as it grapples with a prolonged downturn in commodities prices, and in February posted a full-year loss of $224 million on the back of hefty writedowns related to a restructuring of its business.
On Thursday, it said all its mineral sands production could be processed at its Western Australian plant near Geraldton.
As a result, it will put the Hamilton plant on care and maintenance status in October.
At 1015 AEST, Iluka shares were up 11 cents, or 1.4 per cent, at $8.13 in a strong Australian market.
