Iluka Resources will cut 33 jobs and shutter its Jacinth-Ambrosia zircon operation in South Australia due to weak demand.
The workers will be made redundant while the remaining 46 workers will be retained or redeployed as Iluka suspends its Eucla Basin mining operations for 18 to 24 months from April 16.
Iluka, which produces zircon and rutile used in paints, ceramics and other products, will continue to supply key customers with finished product inventory and through continued processing of existing concentrate inventory.
Managing director David Robb said the decision to suspend mining and concentrate production activities at Jacinth-Ambrosia will increase the company's free cash flow at a time of low industry returns.
"Inevitably, there will be further job losses associated with contractors and support services to the operation," he said in a statement on Tuesday.
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"Iluka recognises the significant impact the decision to suspend mining and concentrating operations will have on employees and their families and on local communities."
Mr Robb said Iluka will work with the state government and regional bodies to co-ordinate transition arrangements.
The company expects to record a net cash cost benefit of $30 million in 2016 after $16 million in idle, restructure and rehabilitation costs.
In the past, Iluka has reduced production at the mine and operated it at capacity to maintain operating efficiency.
Mr Robb said Iluka's South Australian royalty payment obligations would not be affected.
The company says that at peak production the Jacinth-Ambrosia zircon operations can supply up to 25 to 30 per cent of global zircon demand.
Shares in the company were four cents, or 0.6 per cent, higher at $6.73.
