Iluka Resources Limited (ILU) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. I'm Robert Cole, and I'll be chairing the meeting today, as I'm at the physical venue and can substitute for Martin. I'm pleased to be presiding over this the 65th Annual General Meeting of the company. And on behalf of the Board, I'd like to welcome you. In light of the exceptional circumstances we find ourselves in with COVID-19, we're webcasting this meeting from our Iluka's offices here in Perth. Due to travel restrictions, the other directors, including the Chairman, Greg Martin, will be joining the meeting via audio link from the various locations around Australia. It's regrettable that we are not able to meet with shareholders in person today. However, we all need to play our part with social distancing, as we work together to slow the spread of COVID-19. While every effort has been made to ensure that this runs smoothly for our shareholders, if technology issues do arise, you'll be able to access the Chairman's and Managing Director's addresses and the results of the meeting on the ASX platform and on our website. We're looking forward to resuming our usual meetings next year. Well, as this meeting has being held by webcast, the opportunity to ask questions is still available. If you wish to ask a question, you may do so through the question facility on the webcast. Please ensure that you registered through the webcast as a shareholder and not as a guest, as only shareholders are entitled to ask questions at this meeting. If you have a question already prepared, please submit it now, so that we can answer as many questions as possible when we come to the relevant agenda items. Questions will come through me in the first instance as Chair of the meeting. I'll read out the questions, and I will then pass those questions on to the most appropriate person to answer, such as Greg, our Chairman; or Tom, our Managing Director. Each shareholder should restrict themselves to no more than 2 questions. Please also keep short and to the point, so that as many shareholders as possible have the chance to ask a question. It would also be helpful if you could please start your question with the resolution number to which it relates and provide for affiliation if you're not here today in your personal capacity. I'm advised that a quorum of members is present by virtue of the proxies that I hold as Chair of the meeting. Therefore, I formally declare the meeting open. Before we commence proceedings, I'd like to acknowledge the traditional custodians of the land we are broadcasting from here in Perth, the LoJack people. I wish to acknowledge and respect their continuing culture and the contribution they make life of this city in this region. I'd now like to hand over the meeting to our Chairman of the Board, Greg Martin, from his home in Sydney.

Thank you very much, Rob, and thank you also for serving as Chairman of the meeting and opening today's Annual General Meeting. Well, good morning, ladies and gentlemen, and thank you for joining us in these most extraordinary times and circumstances. I trust you, your families and loved ones are all well, practicing social distancing, washing hands, and just like me, managing the growing cabin fever. When we gathered at the Perth Convention Center this time last year for Iluka's 2019 AGM, who would have thought that just 12 months later, we'd be meeting in this manner for our 2020 AGM. This is certainly a first for Iluka, and hopefully, this 65th Annual General Meeting will be remembered and remembered for all the right reasons. Although you can't see either my co-directors arrive this morning in the customary manner at an Annual General meeting, I do want to assure you that we are maintaining our usual high standards of dress and appearance. From my part, I've shaved, changed out of my PJs and put on a fresh shirt for today's AGM, although I must confess that I'm not wearing a tie as the slide on your screens now might suggest. Speaking of my fellow directors, I'd like to start by introducing them to you. As you might observe from the picture on the screen in front of you, we have 2 new board members to introduce to you this morning. And a little clip of a vibrant and bright colors should give you a clear as to who those new members of the Board might be. Details of each director's experience and qualifications are outlined on Pages 45 to 49 of the Iluka 2019 annual report. As mentioned, Rob Cole will be chairing this meeting because he is at the physical venue and can substitute for myself. Rob joined the Board in March 2018 and is a member of the people and performance committee. The remaining directors are attending the meeting via audio link. First is Jenny Seabrook, who joined the Board in May 2008. Jenny is Chairman of the audit and risk committee. As previously announced, Jenny will be stepping down from the Iluka Board at the end of this meeting. And I'll say more about Jenny and her significant contributions to the Board during my Chairman's address a little later on. Next is Susie Corlett, who joined the Board in June 2019. Susie is a member of the audit and risk committee. This is Susie's first AGM with Iluka and is also standing for election today. I'll introduce Susie before the resolution for her election, and Susie will address the meeting via a prerecording. Next is Lynne Saint who joined the Board in October 2019. Lynne is a member of the audit and risk committee also. This is Lynne's first AGM with Iluka, and she is also standing for election today, and as with Susie, I will introduce Lynne to you before the resolution for her election, so that she can address you via a recording as well. Next is Hutch Ranck, who joined the Board in January 2013. Hutch is Chairman of the people and performance committee. Next is Marcelo Bastos, who joined the Board in February 2014. Marcelo is a member of the audit and risk committee and is standing for election today -- sorry, for reelection today. I'll introduce Marcelo before the resolution for his reelection, and Marcelo will also address you. In addition to the committee memberships just mentioned, I note that all nonexecutive directors are also members of the nominations and governance committee. Next, I'd like to introduce Tom O'Leary, Iluka's Managing Director, who joined Iluka in September 2016. Also in attendance at Iluka's office in Perth is our company Secretary, Sue Wilson, who joined Iluka in December 2016. Also present today via audio link are members of Iluka's executive management team who are currently being shown on the screen, and dressed in a manner reflective of how the Board normally sees them at Board meetings. I have to say it'd be interesting to see how they are all dressed this morning in attending this hybrid AGM. And finally, Justin Carroll is participating by audio link today as representative for PricewaterhouseCoopers, the company's external auditor. Justin will be available via the audio to answer any questions shareholders may have on the conduct and content of the 2019 audit and the auditor's report. And as I do every year, I would encourage you to ask questions of Justin. Now moving to the formal part of the meeting. The notice of meeting for this year's Annual General Meeting was distributed to shareholders in March, and I propose that to be taken as read. As in previous years, formal business will commence with my address. At the outset, I have to say that we're prevented from convening under the same roof as is customary for Iluka at this time of the year. And I think I speak for everyone when I say that we are looking forward to hosting an Annual General Meeting of a more familiar style next year. We meet, of course, in unprecedented circumstances. The past weeks and months have seen the COVID-19 pandemic escalate, matched by a worldwide health and economic mitigation effort. Rather than seek to add to the litany of commentary on the unfolding crisis, I'll keep my remarks brief and focus on what matters from a business perspective, which I think is captured in the following 3 key points. Iluka's first priority now as ever is the safety and well-being of our people, their families and the communities, in which we operate. Following the emergence of the pandemic, we initiated a range of precautionary and scalable measures to manage the company's response. We've also worked closely with our contractors, customers and suppliers to align our approach. Quite apart from ensuring Iluka was appropriately prepared, these measures form an important component of the collective efforts of our home countries and governments with whom we are in regular contact. At least in the short term, the economic impact of the pandemic on our Iluka's business, like all others, is uncertain. This is likely to remain the case for some time. We are looking forward to taking questions from shareholders a little later in the meeting insofar as they may relate to this specific topic. And you'll appreciate we'll do our best to provide answers with the information currently available to us. Substantive updates will be provided to the market in the usual way as and when this picture becomes clearer. Iluka had a track record of resilient business performance, which is underpinned by strong financial, operational and market fundamentals. This resilience was demonstrated last year with the company posting one of the best underlying results in its history while commissioning 5 key capital projects and amidst an increasingly challenging business environment. Needless to say, the external environment is now many orders of magnitude more challenging, rendering our capacity for resilience that much more essential. Tom will elaborate shortly in his address on the elements reinforcing our Iluka's resilience. For the Board's part, we are confident the company possesses the wherewithal to emerge from the pandemic well-positioned to respond to the eventual global economic recovery. Shareholders would be aware that Iluka published its annual report on the 20th of February and its sustainability report on the 3rd of April. Key features of the company's 2019 performance are outlined in these documents. And I will not repeat these today, but I do encourage you to review our reports if you have not done so already. Copies are available either by post or online at Iluka's website. Two significant decisions taken by the company last year do, however, warrant specific mention. The write-down of Sierra Rutile and the proposed demerger of the Mining Area C Royalty business. Beginning with the former, we have communicated previously that challenges encountered at Sierra Rutile since Iluka's acquisition of that business in late 2016. The targets and assumptions of the investment pace have not been realized including in relation to confirming a defined development path for the Sembehun deposit. This necessitated a write-down of the carrying value of Sierra Rutile to reflect the remaining life of the business's current operations and the lesser option value for Sembehun. This was clearly a very disappointing outcome. Nevertheless, Sembehun remains one of the largest high-quality known retail deposits in the world, and Tom and the team are continuing to assess development options for this project with an appropriate balance between risk and returns, particularly given our experience to date. As Sierra Rutile's current operations at Lanti and Gangama, expansions to each of these assets were delivered successfully during the course of last year, and we were pleased to see improved production performance over the second half of the year. Turning to the proposed royalty business demerger, I can vote the Board's rationale in taking its decision in my annual report letter. To recap, BHP's development of its South Flank project, which is wholly within the mining area of Sierra Rutile area and now more than 50% complete, holds the prospect of substantially increasing future cash flows generated by Iluka's royalty business. The greater clarity, proximity and certainty in relation to South Flank's development enabled the Board to form a view that a demerger is the best means to deliver value to shareholders from what is a historically significant expansion of BHP's Pilbra iron ore mining operations. In releasing Iluka's 2019 results, we stated our intention to put the proposed demerger to a vote of shareholders to do so this year and to provide a further update on the time line for doing so at today's AGM. Notwithstanding the global economic volatility as a result of COVID-19, the first 2 components of that triad outcomes remain at the company's position. However, the marked increase in travel and social distancing restrictions between February and now mean that I am unfortunately not in a position to deliver the third component this morning, beyond reiterating Iluka's intention to undertake the demerger in 2020. You will appreciate that the practicalities of executing a demerger, including matters such as shareholder engagement, arranging and holding an extraordinary general meeting and the like, are somewhat difficult and unpredictable in the current climate. I can, however, assure shareholders this morning is that preparations are continuing, and the Board will proceed with the demerger when it is practicable to do so. We will update the market in this regard as and when appropriate. Participating at their first Iluka Annual General Meeting today, albeit virtually, our new directors, Susie Corlett and Lynne Saint. Susie and Lynne commenced their appointments in June and October, respectively. Both retire at this meeting and stand for formal election in accordance with Iluka's constitution. By contrast, attending her last annual General meeting as an Iluka Director is Jenny Seabrook, who retires today having first joined the Board in 2008. Jenny has overseen considerable progress, development and change of Iluka during her tenure and has served with great professionalism and distinction as Chair of the audit and risk committee. But Jenny's considerable and considered contributions will be missed, goes without saying. As shareholders will be aware, Jenny will serve as an honorable chair of the royalty company once the demerger takes place. On behalf of my fellow directors and all of Iluka, I thank you, Jenny, for your outstanding service to our company over the past 12 years. I began my remarks at last year's AGM by saying that Iluka was well-positioned financially, strategically and culturally to deliver on its objective to deliver sustainable value. While the concept of sustainable value may acquire a new frame of reference for companies in the aftermath of the present crisis, it is my assessment that Iluka finds itself in the same position. In 2019, we weathered the challenges and proved resilient. Over the coming year, we will doubtless encounter further likely even greater challenges, and I believe we will prove resilient once more. I thank shareholders for their continued interest in and support of the company. My best wishes to on your families at this unprecedented time. I'll now hand over to Tom to share with you our current business priorities and future opportunities. Thank you. Tom, now over to you for your Managing Director's address, please.

Thanks, Greg, and thanks, Rob, and welcome, everyone. Reflecting the Chairman's emphasis on safety being the company's first and enduring priority, I'll commence with an overview of the COVID-19 crisis management arrangements we have in place at present. Iluka took the preemptive step of restricting all travel to and within China in January including for our expert sales and marketing managers who are based in Shanghai. The company established a formal crisis management team on 5th of March. This team is led by our Chief Financial Officer, Adele Stratton, and is charged with the coordination and oversight of Iluka's crisis response at the group level. Emergency management teams have also been established at each of our operational sites. We've been following the advice of government authorities and have implemented a number of changes to work practices to reduce the health risk posed to employees. Site-specific infectious disease management plans are in place to minimize the risk of infection at our operations and also they'll be prepared in the event of an infection. These arrangements are being reviewed on a daily basis. Furthermore, all company roles capable of being undertaken from home have transitioned as such. This accounts for the vast majority of support role that are not carried out on site. While it's been a matter of delicate balance, Iluka has, to this point, managed to maintain operational continuity. Despite the border restrictions instituted throughout Australia and West Africa over the past month, the continued functioning of our sites has the support of the Western Australian, South Australian and Sierra Leone government. For the most part, Iluka has the advantage of workforces located in close proximity to our operations. We've also benefited from some interstate at Jacinth-Ambrosia and expat at Sierra Rutile, employees volunteering to relocate to South Australia and Sierra Leone temporarily, thereby limiting the impact of border restrictions on our business. Given the circumstances, I think it's appropriate that I acknowledge these members of our team for their selfless efforts and dedication. The company's supply chains too remain fully operational at this time, and we are moving product as planned. In the last couple of weeks, Iluka's response to the pandemic has become more business as usual with infection risk minimization and business continuity efforts now focused on continuous improvement rather than implementing new measures. This is the case, particularly in Australia. Sierra Leone has far fewer reported cases of COVID-19 and the pandemic is at an earlier stage there than in other countries. In response to the changed emphasis, our crisis management team is for the moment meeting less frequently and the executives' attention is being directed to Iluka's longer-term settings to ensure the company maintains its strength through the challenges ahead and is well placed for longer-term success. As Greg alluded to, the outlook for 2020 and the specific impact of the pandemic on our business remain uncertain. As a result of this uncertainty, Iluka has today withdrawn its 2020 guidance. We have demonstrated in the past the flexibility to adjust our operational settings in line with market conditions as required. The executive is working through a number of potential scenarios in this regard and will update the market in the event of any changes. In terms of our key commodity markets, the first quarter is traditionally a seasonally low period for zircon sales. This year, the impact has been exacerbated by the widespread factory shutdowns that occurred in China, where we sell around 60% of our zircon in January and February. Iluka had planned for these seasonal low zircon sales and so had factored in a relatively weak first quarter. The full details of which will be in our quarterly review to be released later this month. The pace at which factory utilization and capacity rates in China normalize will be an important influence on our zircon sales for the remainder of the year. It's perhaps also worth noting that a number of our zircon customers are themselves supplying to customers located in Europe, including Italy and Spain, where the pandemic has hit especially hard. As in 2019, we'll work with our customers to adjust product offerings as necessary to meet their requirements and market conditions more broadly. For our titanium dioxide feedstock business, the take-or-pay off-take agreements we have in place for rutile and synthetic rutile production provide a high degree of revenue certainty. These arrangements are outlined in our annual report. Iluka's financial position is strong, and we have the balance sheet capacity to withstand a global downturn. We ended last year with net cash after delivering on a significant $198 million capital expenditure program. As of today, we have no debt and undrawn facilities of $519 million. Managing this source of strength prudently is always a key priority for us, never more so given the prospect of acute and prolonged market volatility. Regrettably, work on the company's project development portfolio, which provides a range of options to sustain, grow and diversify Iluka's business, has been curtailed in the short term by restrictions on the movement of people as a result of COVID-19. Whereas we scheduled for the first half of 2020 key mining trials at Balranald in New South Wales and Sembehun in Sierra Leone, both by necessity have been delayed until at least later in 2020. The completion of preliminary feasibility studies for our Wimmera and Atacama projects have also been delayed to 2021. Some activities can still be progressed despite the pandemic, and work on these projects this year will focus on addressing their respective technical challenges. Each of these delays is obviously frustrating, particularly given our project pipeline has a number of very important opportunities. On a more positive note, the commissioning of Phase 1 of our Eneabba mineral sands recovery project in Western Australia has been able to continue with first sales in the third quarter. Eneabba is a unique strategic stockpile rich in monazite in zircon, resulting from Iluka's historic mineral sands processing operations. And I can update that the project has been commissioned on product yesterday. The monetization of this stockpile not only generates very strong returns but also reduces an ongoing rehabilitation of obligation. It will establish our reentry into the market for monazite, a mineral containing rare earth, and mark an important diversification for the company. The customer and shareholder credibility we hope to demonstrate from the success of this project will feed into related developments currently at feasibility study stage including Phase 2 at Eneabba and longer term, the Wimmera project in Victoria. When I wrote to shareholders in February, I noted that Iluka commenced 2020 with a healthy balance sheet, settled operations, a diverse project pipeline and a demonstrated capacity to adapt to changes in our key markets, both of which display strong fundamentals over the long term. While the COVID-19 pandemic will challenge our business like others, possibly an unprecedented ways over the next year, these elements remain as true today as they were 2 months ago. While I have no doubt that our ability to adapt will once again be tested, we confront the current and coming uncertainty from a position of underlying strength, and this should not be underestimated. That strength is similarly reflected in our decision to demerge industrial Iluka's mineral sands and royalty businesses, which should provide added assurance of the capital discipline the company will employ as it navigates the path ahead. I'm proud of the efforts and resilience exhibited by our people. And I'd like to conclude by thanking Iluka's employees for their hard work in preparing and implementing the company's pandemic response plans. Thank you once again for your attendance this morning. We look forward to taking your questions, and I'll now hand back over to Greg.

Thank you, Tom, and again, thank you to you and your team for all of the work you're doing, I think, sort of amidst this black swan event. Transcripts of both my address and that of the Managing Director are available on the company's website and the ASX company announcement platform. Ladies and gentlemen, we now come to the agenda items of the meeting. Each of the agenda items will now be considered in turn. And for each, we will answer the questions submitted for that item. We've also received a number of written questions in advance of the meeting which we will also address as we come to each relevant item of business. As our time is limited, it is possible that not all questions will be able to be answered today. Questions already covered in my address and that of the Managing Director's will be excluded. If there are unanswered questions on that is not substantially covered in today's meeting, we will publish responses in relation to those matters on our website. In accordance with the Corporations Act and the company's constitution, all voting today will be conducted by way of a poll. With Rob Cole's consent as Chair of this meeting, I now declare the poll open. As announced to the ASX, all voting at this AGM will be conducted by proxy submitted and received by the company before 9:30 a.m. on the 7th of April. Rob in his capacity as Chair of the meeting will vote all directed proxies in accordance with the directions provided by shareholders. Rob is also holding open proxies and will vote all available proxies in favor of each resolution except for resolution 5, which relates to the conditional spill resolution. Based on the proxies received, it is clear that resolution 4 for the adoption of Iluka's remuneration report will be passed with strong support and without a second strike being recorded. On that basis, the condition for resolution 5 will not be met, and the resolution will not be put to the meeting. We will now close the poll. And I have to observe, ladies and gentlemen, that must be the shortest time that a poll has been open at any AGM, certainly any AGM that I've ever attended. Details of the results for each item of business will be shown on the screen. After that item of business. Now let's proceed to the first item of business. The first item on the agenda of the meeting is to receive and consider the annual financial report, the director's report and the auditor's report for the company and its controlled entities for the year ended 31st of December 2019. This item of business also gives shareholders the opportunity to ask questions about Iluka and its operations. Shareholders may also ask questions of the auditor through the webcast facility. Such questions must be relevant to the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted in preparing the financial statements and the auditor's independence. Please note that no resolution or vote is required on the financial reports. To give shareholders a final chance to submit their questions, I will respond to those questions received in advance of the meeting. Rob, can you please read these questions to the meeting.

Yes. Thanks, Greg. These questions are submitted by Geoff Reid of Perth as a proxy holder for many members of the Australian Shareholders' Association. And the first item relates to Sierra Rutile, and begins with a comment, which I'll quote. "All shareholders are disappointed by the continued poor performance of Sierra Rutile. It's lost money in each of the 4 years we've owned it and despite substantial investments, it has not performed profitably to date. It's clear that it has not met the investment business case." Moving to the questions. Will the company persist in attempting to achieve profitable production for SRL? Do you see an exit path? How much time or losses and/or CapEx will you spend before making an exit decision? Are there exit criteria? And what are they? And is there a development plan or timetable for the Sembehun deposit? Greg, if you could respond to the questions.

Yes. Thanks, Rob. Well, good morning, Geoff, I hope you're safe and well as to be able to meet a few weeks back before borders closed down and social distancing became so strict. So I do hope you well, and thank you for your questions and continued interest and support in Iluka and our progress. As you will recall, I did cover the Sierra Rutile situation in some detail in my address and acknowledged that Sierra Rutile operations have not met expectations that the acquisition was based upon. However, the current operations are showing improvement at both Lanti and Gangama expansions that have been delivered and successfully commissioned at the end of last year. And it was pleasing to see that the mineral separation plant was operating at full capacity by year-end. Look, Tom and the team are also addressing potential development options for the Sembehun project. However, as you'd appreciate, the COVID-19 pandemic has delayed the timing for some time of the trials at Sembehun, and we'll be reviewing the timing for these later in the year as the situation and circumstances become clear. So hopefully, that addresses that question.

Okay. There is a second follow-up question from Geoff Reid of the ASA, relates to the proposed demerger. And it reads, "the ASA commends you for finding a mechanism to split the MAC royalty from the remaining mineral sands business. We believe this is in the interest of shareholders, providing it's done in a tax effective manner. We have, well a request. Can you please ensure that RoyaltyCo is established with a very low fixed cost structure because this cost structure will persist for many years and is hope to avoid RoyaltyCo becoming the most expensive post office box in there. Greg, could you respond to the follow-up questions?

Fair enough request, Geoff, and I'm sure it's a request and it's shared by all of Iluka's shareholders. Look, in responding, I think if you look at established royalty businesses, they're typically highly scalable with low staffing levels and overhead costs relative to revenue. RoyaltyCo will be consistent with this model, and it will have a lean corporate structure and likely only a handful of employees initially. Whilst there are some costs that come with being an ASX listed company such as listing and board fees, it's expected that other fixed overhead costs will be kept low as a result of this small number of employees. In answering the question and more so the premise that I think is behind it, it's important to note that this small management team will be charged with the execution of RoyaltyCo's full business plan. And whilst obviously, managing and maximizing the value of existing royalties is an important and essential part of the business plan in proceeding with the demerger, the Iluka Board has recognized the significant opportunity to create additional value by investing in new royalties. This second element will be key to the business' success. And we'll consume a substantial amount of management's time, I've got no doubt. The business, therefore, is simply not going to be, as you described, a post-office box. The executive team that we put in place will have a combination of appropriate commercial and technical skill sets that are required to both manage the existing asset portfolio effectively as well as over time, assess new opportunities. However, clearly, it would be efficient to seek to maintain a team of expertise in every potential area of investment. Rather, in order to minimize fixed costs to the extent that future opportunities require specific skill sets to evaluate, be it commodity-related or some other technical disciplines that the company requires, this expertise we brought in through external experts on a short-term basis as and when required. So hopefully, just that will provide you and other shareholders attending the meeting with the assurance that you're seeking. Thanks, Rob.

Greg, the -- no other questions have come through online. So I think you're good to go to the next item of business.

Okay. Thank you for that, Rob. Well, we will now move on to the next item of business. And in doing so, Rob, forgive me and shareholders that are listening to the meeting, Justin Carroll, you've managed to escape answering a question at an Annual General Meeting in my time as Chairman of the company. So very well done. Obviously, shareholders are very comfortable as is the Board with the manner in which you've conducted the external order at Iluka over a number of years now. But now let's move on to the next item of business. The next item of business is for the election of Susie Corlett, resolution 1, in the notice of meeting. Details of Susie's qualifications and experience are set out in the notice of meeting. Susie was appointed by the Board as an additional Director in June of last year and retires in accordance with Article 16.4 of the company's constitution. Being eligible, Susie offers herself for election at this meeting. Before a new director is appointed, the Board considers the skills and qualities required to complement the existing directors and requirements of the company. A professional search firm was engaged during the process, all members of the Board were involved in the final selection and thorough background checks were conducted prior to Susie's appointment. Susie's experience in exploration, mining operations, project finance and credit risk management will further strengthen Iluka's Board as the company continues moving into its next phase of development. Susie is considered by the Board to be an independent director. The Board with Susie abstaining unanimously supports her election this morning. In light of COVID-19 travel restrictions and measures of social isolation, Susie has prerecorded her address in advance of the meeting which I now ask be played to the meeting. Thank you.

Thank you, Chairman. And good morning, ladies and gentlemen. It is such a pleasure to speak to my election as an independent nonexecutive Director of our company. Representing your interest is both a great privilege and a real responsibility. By way of background, I've enjoyed a 25-year executive career in the mining and mining finance industries. Having qualified as a geologist, my early career was spent getting dirt under the fingernails in underground and open pit mining operations across a range of commodities, including exposure to mineral sands during my time RGC Limited. I gained a solid grounding in risk as a result of the move into credit risk management at Macquarie Bank. I was responsible for managing credit risk asset workouts and company turnarounds for Macquarie's global mining business. This experience was invaluable as I took on senior roles leading mining projects finance transactions for Deutsche Bank. And then as part of a small team, establishing an Australian-based mining project finance franchise for the Standard Bank group. Lot of my career has involved funding mining project developments and expansions in emerging nations. As such, I've worked on the ground in over 25 countries focused principally on Africa, Asia, Pacific Rim, South America and Australia. These experiences have gifted me with a broad perspective on soften risk, cultural differences and a recognition of the importance of shared values. I expect that last 10 years of my Executive career as an investment director for a global mining private equity fund, which was exposed to a range of industry segments including mineral sands. Here, I contributed to generating significant shareholder value through successfully delivering organic and inorganic growth, restructuring businesses and serving as a non-executive director for ASX and TSX listed companies. In summary, my executive career has given me the somewhat unique ability to combine on one hand, mining technical skills with risk and finance expertise on the other, this uncommon combination that has been instrumental in creating value for stakeholders, and I'm really pleased to be able to bring this experience to Board deliberations at Iluka. I'm proud to have been a vocal advocate for safety, social and environmental responsibility throughout my career. And this commitment features prominently in my thinking when assessing the Board agenda items. I currently serve as a non-executive director of ASX-listed Aurelia Metals. I'm a director and the treasurer of the foundation of National Parks and Wild Life, and I also serve as a trustee of the IMM Education Endowment Fund. I relish the opportunity of making a meaningful contribution to the future of this great company. Thank you for your support for my election.

Well, thank you, Susie, for that address, and shareholders, I'm sure you'll agree, a very unusual and rare combination of the director standing for election in both to be able to get dirt under her fingers from being down the mine, whilst working on a spreadsheet. So thank you for that address, Susie. Now Rob, are there any questions from shareholders in relation to...

No, nothing. Nothing has come through in real time, Greg. So good to proceed to the next item of business.

Well, thank you, Rob. But before we do, let me just put the details up on the screen now, if we could, of the results given the poll has been closed. And the results of the voting in relation to Susie's election to the Board. Susie, looks like she's just striking in with 99.65% of shareholders voting for the resolution and a near 0.35% against. So the resolution has clearly been passed. And I now have great pleasure in declaring Susie Corlett elected as a director of the company. Congratulations, Susie. Now moving on to the next item of business. The next item of business resolution 2 is the election of Lynne Saint to the Board. Details of Lynne's qualifications and experience after that in the notice of meeting. As I said previously, Lynne was appointed by the Board as an additional director in October of last year and retires in accordance with Article 16.4 of the company's constitution. Being eligible, Lynne offers herself for election at this meeting. Again, as with Susie's appointment, a professional search firm was engaged. All members of the Board were involved and all background checks were conducted prior to Lynne's appointment. Lynne brings to the Board expertise encompassing corporate governance, enterprise and supply chain risk and project management. Lynne is a fellow of the Australian Society of practicing accountants and the Australian Institute of Company Directors. Lynne will take over as Chair of the audit and risk committee upon Jenny's retirement at the end of this meeting. Lynne is also considered by the Board to be an independent director. The Board with Lynne's abstained unanimously supports Lynne's election. Lynne has also recorded her address in advance of the meeting, which I now ask to be played to shareholders. Thank you.

Hello, everyone. It's my pleasure to address you today. I am seeking your endorsement for my election to the Board of Iluka as an independent non-executive director. My career spans more than 30 years and has largely been in mining and mining services in London, Singapore, Australia, Papua New Guinea and in the U.S. As a young auditor in the '80s, I planned it over silica stockpiles and up the ships ladder to check the sand actually was being loaded. In the '90s, I worked in finance roles on several gold mines in New Guinea. It's fair to say that mining gets under your skin. And for this accountant, I decided early that mining is a lot more interesting than filling in tax returns. Over the past 20 years, I've been an Executive and Principal Vice President of the Bechtel group, a USD 30 billion to USD 40 billion company and one of the world's largest multinational engineering, construction and project management companies. Firstly, as Chief Financial Officer of the Mining and Metals business and the Australian operating companies based in Brisbane. And lastly, as the Chief Audit Executive of the group based in the U.S. During my 11-year tenure as CFO, the Mining and Metals business grew tenfold, building some of the world's largest mining projects in Asia Pacific, the Middle East, the Americas, Iceland, Norway and West Africa in bauxite, alumina, aluminum, copper, gold, nickel, coal and potash with a 50,000 strong multinational workforce. It also saw the construction of 3 LNG plants in Queensland with combined construction value of about $25 billion, all fixed price, all on 1 small island and representing the largest concentration of risk in Bechtel's 120-year history. The CFO role is quite unique, much more than just managing the money. Establishing the pricing strategy where the -- some of the cost plus negotiating contracts with customers, determining the appropriate risk allocations and the procurement of goods and services along with monitoring and measuring performance across engineering, installation and labor productivity rates and the resulting cost and schedule performance. I had a guiding hand in the commercial success of the business in this period by prudently balancing risk with reward and delivering superior results for the company and for its customers. In 2013, I was appointed head of the audit function for the Bechtel group designing and implementing risk and assurance standards across all business lines, all companies, subsidiaries and joint associations in all jurisdictions in which we worked. During this time, I was instrumental in delivering corporate governance programs in such areas as fraud, modern slavery and supply chain risk, anti-bribery and corruption and ethics, all aimed at strengthening the company's defenses against these threats and assuring global compliance. I bring to the Board of Iluka complementary and diverse set of skills in finance, corporate governance and risk and in the delivery of mega-capital projects. I look forward to furthering that contribution over the next 3 years, and I thank you for your support for my election.

Well, thank you for that address, Lynne, and shareholders, I'm sure many of us can relate to one of Lynne's comments that the mining is much more interesting than filling in tax returns, although perhaps during this time of being in self-isolation, maybe a good time for those of us who are a little behind to catch up with our tax returns. I think shareholders who also have noted from Lynne's comments and the details in the notice of meeting that Lynne had a very distinguished international career, which is a great relevance to Iluka and what lies ahead. And as with Susie, we look forward to Lynne's continuing contributions. So are there any questions Rob in relation to this resolution?

No, nothing's come through online, Greg, so back to you.

Okay. Thanks, Rob. Details of the results for this item will now be displayed on the screen. And again, the results show that Lynne has overwhelmingly -- have the overwhelming endorsement of shareholders with 99.63% voting in favor of the resolution and just 0.37% against. So this resolution has clearly been passed, and it also gives me great pleasure in declaring Lynne Saint elected as a Director of the company. Congratulations to you too. That's fantastic. Now moving to resolution 3, which is a reelection of an existing Director. It's the reelection of Marcelo Bastos, which is detailed in resolution 3 to the notice of meeting along with details of Marcelo's qualifications and experience. Marcelo was appointed to the Board in February 2014 and considered by the Board to be an independent director. He was last reelected at the 2017 AGM and retires by rotation of this meeting in accordance with Article 17.1 of the company's constitution. And being eligible, Marcelo offers himself for reelection. The Board with Marcelo abstaining unanimously supports Marcelo's reelection. Marcelo has also recorded his address in advance of the meeting, which I now ask to be played to shareholders. Thank you.

Thank you, Chairman. Good morning, ladies and gentlemen. I'm pleased to have this opportunity to address you in relation to resolution 3, concerning my reelection to the Board. I've worked in the mining industry for 34 years and being on Iluka Board for the last 6 years, with this being my second opportunity for reelection. I commenced my career with Vale back in 1985. I worked in various commodities and led Vale as Director of nonferrous operations. In 2004, I joined BHP business as President of Nickel Americas, then President of Nickel West, in Western Australia. And finally, in 2008, I was promoted to CEO, BHP Mitsubishi Alliance, BMA. In 2011, I left BHP to join MMG Limited as Chief Operating Officer. I was responsible for the group's global operations, together with sales and marketing. I also led the acquisition and development of the Las Bambas copper mine in Peru, one of the largest copper mines built in the world this century. I retired from my executive career in 2017. Since then, I've joined the Board of Horizon Holdings Limited in 2017, Golder Associates in 2017 and Anglo American PLC in 2019. For the last 6 years, I've supported management and my board colleagues in building Iluka further during a time of adverse price trends and difficult change in the marketplace. As a mining company, Iluka focuses on generating value for its shareholders. So the value I bring to the Board is 34 years of experience and knowledge in the global mining industry. It's my privilege to be on the Iluka Board. I welcome the opportunity to continue bringing to Iluka my skills and experience, providing Iluka with an extensive and contemporary understanding of the mining industry in Australia and globally. Thank you.

Well, thank you, Marcelo, for that address. And again, ladies and gentlemen, I think you've heard Marcelo's experienced over 34 years in the mining industry, but Marcelo is truly a global miner with tremendous and terrific operational experience, which I can assure our shareholders is a tremendous benefit to the Board in terms of Board deliberations of operational matters and health and safety issues, in particular. So thank you for that address Marcelo. Rob, do we have any questions from shareholders in relation to this resolution? Hello, Rob?

Sorry. No, I was -- I had forgot to unmute myself, apologies for that. No questions. Back to you, Greg.

Thank you, Rob. I just trust that you weren't doing e-mail through to the AGM. Because, as you know, that's totally banned at Board meetings. You know the fact that I can't see you, I hope you haven't sort of fallen back onto bad habits. Point of order though. Ladies and gentlemen, details of the results for this item are now being displayed on the screen in front of you. And again, overwhelming support for the reelection of Marcelo to the Board with 99.2% in favor of the resolution. Clearly, it has been passed, and I have great pleasure in declaring Marcelo Bastos reelected as a Director of the company. And Marcelo, congratulations to you and look forward to your continuing substantial contribution to Iluka and Board deliberations. Well, ladies and gentlemen, the next item of business asks shareholders to adopt the company's remuneration report for the year ended 31st of December 2019. It's resolution 4 in the notice of meeting. This is an advisory vote of shareholders, and it does not bind the directors of Iluka. However, under the Corporations Act, if at least 25% of the votes validly cast on the resolution to adopt the remuneration report at 2 consecutive annual general meetings are against the resolution, shareholders must be given an opportunity to vote on a spill resolution at the second meeting. This is known as the 2 strikes rule. Iluka received a first strike against its remuneration report at last year's AGM. Since that time, the Board has engaged with investors and proxy advisers to understand key concerns and determine an appropriate response to the first strike received on the 2018 remuneration report. The Board continues to believe that the fundamental objective of the executive incentive plan remain appropriate for Iluka's business. The plan seeks to align executive interests with shareholders over the long term, by enabling executives to build a significant shareholding in Iluka, subject to the company's and their own individual performance. Following the feedback received, the Board has implemented several changes to the executive incentive plan for 2020. These changes have extended the time period, over which the plant operates to 5 years, increase the financial weighting in our performance scorecard to 50% and change the performance assessment of the longer-term performance rights award to scale vesting for the relative total shareholder return test. In further discussions with shareholders and proxy advisers, we have received positive support for these changes, and we thank you for your engagement and feedback during that process. I now ask that you submit any questions for this item of business through the webcast facility. Rob, could you please read the question received in advance of the meeting to shareholders. Thanks.

Yes, thanks, Greg. This question was submitted by a shareholder, Anna Marie [ Hedviga ]. I'll read it, "the changes implemented by the Board are noted, but does the Board consider that it was appropriate not to make any changes to the 2019 incentives that have been awarded to executives." Greg?

Yes. Thanks, Anna. Thanks, Rob and thanks, Anna, for the question. Look, it's a fair question, and I can understand why it just might be asked. But look, at the end of the day, the Board determined that it wasn't appropriate to change the 2019 scheme pathways through the year as performance targets have already been set and were being worked towards. This approach was understood by investors and proxy advisers that we met with during the course of 2019. And so with that support and the practicalities of making a change midway through the year, we felt it not appropriate to change. However, as I said in the comments I've just made for the meeting for the 2020 awards, then the new scheme features will indeed operate. Hopefully, that answers your question, Anna. And Rob, are there any more questions from the meeting?

No. No questions, Greg. Nothing has come through online. So back to you.

Okay, fine. Thanks, Rob. So look, let's now turn to, look at the results for this item, which are displayed on the screen. Pleasingly, the results of the meeting show that 97.35% of our shareholders are supportive of the 2019 rem report. As a consequence, clearly, the votes on the screen shows that at least 75% of the votes that have been validly cast on resolution 4 were in favor of the adoption of the remuneration report. And as I mentioned at the commencement of the meeting, this means that no second strike has been recorded and the conditional items of business resolution 5 will not need to be put to the meeting. So thank you, ladies and gentlemen, that concludes the formal part of the business -- of the meeting. And I just have to say, I'm very sorry that we're not able to mix informally now. Following the meeting as we normally do have a tea coffee and much enjoyed an famous sausage rolls and sandwiches. So hopefully, we'll be able to next year return to a normal post AGM discussions and get together. So with that, thank you very much for your attendance today. I'm now going to hand you back to today's Chair, Rob Cole, to close the meeting.

Thanks very much, Greg. And it seems in that the technology all worked. The only thing I had to suppress was we had a fire alarm in the background here. But I managed to mute quickly, and it didn't seem to come through, and I proceeded regardless. Anyway, thanks very much, Greg. Ladies and gentlemen, that concludes the proceedings of today's unusual Annual General Meeting. I'd like to thank you all for your virtual attendance, participation and understanding of the highly unusual circumstances in which we're meeting. So I now formally declare the meeting closed. I'm sure that we all look forward to the return to our normal AGM procedure next year. Details of the results of today's meeting will be posted on both the company's website and on the ASX company announcement platform shortly. Thank you for joining us and keep safe.

Yes. Thanks, Rob.