Iluka Resources Limited (ILU) Earnings Call Transcript & Summary

Well, good morning, ladies and gentlemen. I'm your Chairman, Greg Martin. And on behalf of the Board, I'd like to welcome you to the 67th Annual General Meeting of Iluka Resources Limited. As the COVID-19 pandemic is not over yet, today's meeting is being held in a hybrid format, allowing all shareholders the opportunity of attending either in-person or via the Computershare online platform. It is, however, pleasing to see that some shareholders are able to attend here in person today. This is an important event in our calendar and one that the Board looks forward to each year as it gives us a chance to hear directly from all our shareholders and respond to your questions. I'm advised that a quorum is present. Therefore, I formally declare the meeting open. To ensure that everyone has the best opportunity to vote, I now also declare the poll open. You can vote throughout the meeting. If you are voting through the online platform, you can also change your vote up until the time I declare voting closed. I will give you a warning before closing the poll. Before we commence formal proceedings, I'd like to acknowledge the traditional custodians of the land we are meeting on here in Perth, the Whadjuk people of the Noongar nation. I wish to acknowledge and respect their continuing culture and the contribution they make to the life of this city and to the surrounding region. As I've mentioned, the meeting is in a hybrid format, with participation being conducted at the venue itself and via the online platform. I will now explain the process for online questions and comments. Online shareholder participation at this meeting will be supported through the Computershare online platform. Shareholders and proxyholders will have the opportunity to ask questions, make comments and vote at the meeting using the online platform. Please ensure that you have registered as a shareholder or proxyholder and not as a guest, as guests are not entitled to ask questions, make comments or vote at this meeting. If you have registered as a guest, you can change your registration by selecting the plus symbol next to your name on the top left-hand side of the screen, enter your SRN or HIN, country of your registered address, postcode if you live within Australia, and then select "Add holding". To ask a question or make a comment, you may do so through the question facility on the platform. As the meeting is open, the Q&A icon located at the top of the screen is now active. To send in a written question, simply select the Q&A icon, select the topic your question relates to from the drop-down box, type your question and then press the send button. All online questions will come to me as Chair of the meeting via our Company Secretary. If there is a duplication of questions, we will group them together. And if questions are particularly lengthy, we may need to summarize them in the interest of time. I will either answer the question or pass it to the most appropriate person to answer. If you prefer to ask your question verbally, you will need the following instructions on the virtual meeting platform. To avoid feedback, please ensure you mute the online broadcast before you dial. 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 item. For shareholders and proxyholders here at the venue, only shareholders or their proxy, attorney or authorized company representative holding a green or yellow admission card are entitled to ask questions or make comments. All questions should be addressed to me as Chair of the meeting. When I open the floor to questions, please make your way to the microphone with your admission card if you wish to ask a question or make a comment on a resolution. It would be appreciated if you could state, for the minutes, your name and indicate whether you're speaking on behalf of a shareholding you own directly or beneficially and/or whether you are speaking as a proxy for another shareholder or shareholders. Please also state your affiliation if you are not here today in your personal capacity. It is important that as many shareholders as possible who wish to ask questions get an opportunity to do so. I ask that speakers restrict themselves initially to no more than 2 questions per turn at the microphone. If you have 2 questions, please ask them together and limit each question to no longer than 2 minutes. Anyone wishing to speak more than once will be given a subsequent opportunity to do so if time permits, and in the meantime, should kindly resume their seat. As no questions were received prior to the meeting, I will ask for questions or comments first from the floor and then from the online platform. Voting today will be conducted by way of a poll on all items of business. Each shareholder present, either in person, online or by proxy, attorney or representative, has 1 vote for every ordinary share owned. Rod Somes from Computershare Investor Services has agreed to act as returning officer for the poll for this is his seventh time as returning officer. And welcome to you, Rod. It's nice to be back after a 2-year absence. I'm holding open proxies in my capacity as Chairman, and it is my intention to vote all available proxies in favor of each resolution. The result of the poll will be announced later today to the Australian Securities Exchange and will be posted on Iluka's website. I will now explain the online voting process. As the poll is open, the vote icon located at the top of the screen is now active. Selecting this icon will display the resolutions and present you with voting options. To cast your vote, simply select one of the options. Once selected, a tick will appear to confirm receipt of your vote. To change your vote, select "Click here to change your vote" and press a different option to override. Any appointed proxy who has been given discretion on how to vote should vote in the same manner. Any appointed proxy that has been directed to vote in a certain manner and has no discretionary votes to cast does not need to vote as those votes will automatically be counted in accordance with those directions. If you experience any difficulties with the online platform, the helpline number is, and I'll just give you a second to grab pen for those who might need it. The number within Australia is 03-9415-4024. Or if you're joining this telecast from outside Australia, the number is +613-9415-4024. For shareholders and proxyholders here at the venue, at the time of registration for this meeting, those persons eligible to vote were given a green voting card. The voting boxes are on the back of this green card. If you are a proxyholder, a summary of your voting instructions has been attached to the green card you have received. By signing and lodging the voting card, you'll be taken to have voted in accordance with the instructions you have been given. The summary also shows any open votes that you have been given to vote as you consider appropriate. Computershare will collect all the voting cards after all resolutions have been put to the meeting. Alternatively, you may drop your completed voting card in one of the ballot boxes located at the exit if you need to leave the meeting early. There will be an opportunity for you to ask Computershare staff any questions about the completion of your voting card prior to the closing of the poll. Now with all of those procedural matters out of the way, I'd now like to introduce my fellow directors who are at the meeting today either on stage or sitting in the front row. Each director's experience and qualifications are outlined on Pages 57 to 61 of the Iluka 2021 Annual Report. First is Rob Cole, who joined the Board in March 2018. Rob is a member of the People & Performance Committee, in fact, chairs that committee and will take on the role as Board Chairman upon my retirement at the end of the meeting. Rob will be attending the meeting today via video. Next is Susie Corlett, who joined the Board in June 2019. Susie is a member of the Audit & Risk Committee. Next is Marcelo Bastos, who joined the Board in February 2014. Marcelo is also a member of the Audit & Risk Committee. Marcelo is standing for reelection today, and I will introduce him before the resolution for his reelection, and Marcelo will also address the meeting. Next is Lynne Saint, who joined the Board in October of 2019. Lynne is Chair of the Audit & Risk Committee. And next is Andrea Sutton, who joined the Board in March of 2021. Andrea is a member of the People & Performance Committee. In addition to the committee memberships just mentioned, all nonexecutive directors are also members of Nominations & Governance Committee and the Sustainability Committee. Next, I would like to introduce Tom O'Leary, Iluka's Managing Director who joined Iluka in September 2016. Also in attendance is our Company Secretary, Ben Martin. No relation, but does have the same name as my son, which can be very confusing from time to time, but that will resolve itself at the end of this meeting. Also attending today are members of Iluka's executive management team. And the final introduction is for Helen Bathurst, a partner of PricewaterhouseCoopers and the company's external auditor. Helen is attending online today and also has a representative in the room in case her connection fails. Helen or her representative will be available to answer any questions shareholders may have on the conduct and content of the 2021 audit and the auditor's report. 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. So ladies and gentlemen, thank you once again for joining us, whether in person or online. It is with mixed emotions that I commence -- don't worry, nobody died, no one got hurt, it's fine. As I was saying, it is with mixed emotions that I commence my ninth and final AGM as Chairman of Iluka. I am, of course, delighted to present to you. We've had a particularly successful year. And indeed, the last week has been among the most important and potentially transformative in our company's history. But this only underscores how much I will miss the engagement with my esteemed Board colleagues, our exceptional management team and our highly engaged shareholders. It's been almost 10 years since I joined Iluka. As I retire from the Board today and sign off as your Chairman, I feel privileged to have been a director during that time. And I'm very grateful for the support, counsel, guidance and friendship of my fellow directors, both past and present. It's been a truly highlight of my nonexecutive career to have worked with not only such a professional group of directors, but also a really nice group of people, the sorts of folks you'd happily go out to dinner with again and again. It's with great confidence that I now pass the torch to Rob Cole. Rob is a highly experienced and well-regarded Chairman and has a deep understanding of Iluka's business, having been a director since February 2018. He's made an invaluable contribution to the Board over that period, which I know will continue and be amplified as he succeeds me today. Rob will have the benefit of working alongside a talented group of directors and the Managing Director, who's commercial judgment and achievements speak for themselves. Tom, allow me to take this opportunity to express my sincere thanks for the strong, robust and respectful working relationship we have enjoyed these past 5.5 years. Iluka's performance over the last few years, in particular, is a credit to you and to your team. Under Rob and Tom's leadership, I confidently expect the company will realize the significant opportunities now within its grasp. Returning to the business. Iluka's 2021 results are detailed in the Annual Report and Sustainability Report published together this year. I encourage you to review those documents. Copies are available on our website. To summarize the matters Tom and I addressed in our annual letter to shareholders in February. We delivered an excellent set of financial results off the back of strong performance across the mineral sands business. Pleasingly, we improved our safety performance, particularly in relation to serious potential injuries. And we continue to make important progress throughout our project pipeline. These are significant achievements that, in many respects, highlight the strength of the company's response to the challenges presented by the COVID-19 pandemic over the past 2 years. More significantly still is what has occurred since February. Last Monday saw the announcement of a partnership between Iluka and the Australian government to deliver the country's first fully integrated rare earths refinery at Eneabba. This includes a $1.25 billion nonrecourse loan provided by Export Finance Australia. By any measure, this is a remarkable accomplishment and one I regard as the defining step in Iluka's long-standing plans to diversify into the rare earths market. Tom will have more to say on this achievement shortly. But in reflecting on its magnitude for our company and the trust invested in us, I found myself returning to a theme, the importance of reputation. Reputation is, of course, a collective endeavor and the shared responsibility of every member of an organization. From a Board's perspective and from a Chairman's perspective, I think the foundation of reputation begins with strong corporate governance. This has been a focus during my time at Iluka, and I thought I'd make use of my last AGM address to call out a few instances from the past decade that to my mind, demonstrate the company's commitment in this regard. Taking these in chronological order, I'd begin with the series with which Iluka rightly treats its continuous disclosure requirements. When these credentials were questioned by a plaintiff in 2014, many externally expected us to settle, as most companies do when presented with similar legal circumstances. But we didn't do that. Rather, we felt it imperative to defend the rigor applied to our communications with shareholders. And so it was with some measure of satisfaction in February this year that we received the Federal Court's judgment in the Bonham class action case, which found Iluka had complied with all its continuous disclosure obligations. We are in a unique position of being the only company in Australian legal history to successfully defend a shareholder class action that had gone to judgment without appeal. This was a long road to be sure, but one well worth traveling. And it would be remiss of me not to acknowledge the important role played by our former Managing Director, David Robb, in achieving that outcome. Next, our position on anti-bribery and corruption, which I referred to at our 2017 AGM as walking the talk. When Iluka acquired Sierra Rutile in 2016, we knew and were realistic about the higher risk exposure of operating in West Africa relative to our other operations. We determined to commit to a zero tolerance approach. Accordingly, one of our first priorities post acquisition was to conduct a review to identify any areas inconsistent with Iluka's Code of Conduct. Unfortunately, we found some behaviors under Sierra Rutile's previous management that were not in line with those standards. Despite the resulting public scrutiny and operational challenges, we reported these historic breaches to relevant regulatory authorities, including the U.K. Serious Fraud Office, which in turn commenced a formal investigation. Some 3 years later, in 2020, we received confirmation from the SFO that it was ending its investigation, noting the action Iluka had taken to report the conduct in question and cooperate fully. I take this as affirming that we'd done precisely what international enforcement agencies want to encourage, which is for companies to report transparently wherever they see questionable behavior around fraud, bribery and corruption. Lastly, I'd note Iluka's decision in relation to the early return of the Australian government's JobKeeper payment at the beginning of 2021. As I said at our last AGM, maintaining a strong balance sheet has been a core component of our response to the pandemic. When COVID-19 struck, the impact on Iluka's zircon revenue was significant, and the path to recovery are far from clear. We qualified for JobKeeper on this basis, receiving payments totaling $13.6 million. Given our subsequent financial performance as compared to what we feared it might be, we were among the very first companies to take the decision to return voluntarily all of the payments we've received. While we make no claims to perfection, I'd suggest that these are the actions of a company that does the right thing over the easy thing. This is not borne of altruism or image management, but a deeply held conviction on Iluka that reputation, substance and shareholder value are mutually reinforcing propositions. Of course, behind these governance decisions are people, and I'm a firm believer that diversity, all types of diversity, leads to quality outcomes. And I'm particularly pleased that last year, we achieved 50% female representation amongst our nonexecutive directors. At Iluka, as elsewhere, there is still much work to be done in this area, which is not without its challenges, and we can't and won't shy away from that. But our progress at Board level in recent years is self-evident, and I think it's important that we acknowledge that too. I alluded just before to imperfection. It occurs to me that it's probably a bit rich for a valedictory speech not to fess up to at least one area of unfinished business. Sierra Rutile has not delivered in line with Iluka's original acquisition case. In fact, in the early years, its business performance fell well short of our expectations. It was difficult introducing alternative mining technologies, and we had to undertake a major reset last year, including contemplation of suspending operations. Business performance has improved, though, over the past 9 months. However, future capital investment in Sierra Rutile does not now sit within Iluka's priorities, particularly given the myriad opportunities that are present in our Australian business including rare earths diversification. But true accountability starts at the top. Just as I was Chairman when the other decisions I've covered today were taken, so I was for this one. All that said, I trust few will be surprised when I say that I'm far from ready to admit defeat. Today's announcement of our intention to demerge Sierra Rutile, subject to shareholder approval, does, I believe, present the best opportunity for that business to reach its full potential. The demerged entity will be well equipped to implement strategies to maximize the value from both existing operations and the Sembehun project, which is among the world's largest undeveloped sources of rutile. Continuing the principle of accountability, I am delighted to be appointed Chairman-elect of the new company, and I look forward to working with its Board and management team to deliver for Sierra Rutile's shareholders. And that, ladies and gentlemen, brings me to the end of my remarks this morning. Please allow me to once again thank all of those who have made my time at Iluka so memorable and rewarding. This is a truly great company with great people. And it's been my great privilege to serve shareholders as Chairman. Iluka has a very bright future ahead of it. I'll now like to hand over to Tom to describe in more detail the tasks at hand.

Thank you, Greg, and welcome, everyone. It's certainly been an important week at Iluka and an important year at Iluka. As the Chairman has just outlined, in fact, it's been a pretty substantial decade at Iluka. I'd like to commence my remarks this morning by acknowledging Greg's leadership over that period. I joined Iluka back in 2016 and since that time, Greg has overseen the Board's consideration of key company evolutions including our final investment decision of the Cataby development, the demerger of Deterra Royalties, our response to COVID-19 and more recently, both our rare earths diversification and the proposed demerger of Sierra Rutile. Throughout these considerations and countless others, Greg's leadership has been steadfast and I have very much appreciated his advice, encouragement and support. As our shareholders well know, Greg has an inimitable style. I'll confess that this is something about which I am especially mindful at this time of the year. As far as AGMs are concerned, he is a very hard act to follow indeed. Greg, on behalf of all at Iluka, thank you for your service to our company. In both substance and style, you will be missed; and we wish you all the very best for your future endeavors, one of which we've announced just this morning. Returning to developments over the past fortnight, last Monday, 4 April, Iluka announced Board approval for Eneabba Phase 3, a fully integrated rare earths refinery to be built at Eneabba in the Midwest of Western Australia. This decision was taken following the completion of our feasibility study and, very importantly, the agreement of a risk sharing arrangement with the Australian government. As I said at the announcement, this is a game changing project for Iluka and for the Australian resources sector. It will deliver more than $1 billion of investment and well over 300 jobs and will see Iluka's unique Eneabba rare earths stockpile serve as the initial feed for a new downstream refinery, the first of its kind in Australia and one of few globally. The refinery has been designed specifically to process material sourced from Iluka and from third parties. This will position Eneabba as a multi-generational asset for the downstream processing of Australia's rare earth resources. Further, Phase 3 puts Iluka at the forefront of the global transition to an electrified low carbon economy. Rare earths are among the key building blocks of this transition. And the Eneabba refinery will produce the downstream mineral products that are critical inputs across a range of industries and technologies including electric vehicles, sustainable energy, advanced electronics, medical and defense applications. Iluka taking this step means the value addition required to produce these critical minerals will occur here in Australia, indeed, here in Western Australia for the first time. I outlined at last year's AGM that Phase 3 was not an opportunity without risk for Iluka, and we have been deliberate in seeking to derisk it as much as possible. Central to this is our partnership with the Australian government, which recognizes the substantial contributions of both parties. In essence, Iluka has made the decision to put at risk the company's unique Eneabba stockpile, together with $200 million of shareholders' funds to be allocated over the next 2 years. This to realize the opportunity to build a rare earths business of global scale, and in so doing deliver significant, sustainable value over several decades. Because of the nonrecourse nature of the risk sharing arrangement we've agreed with the commonwealth, we've made this decision without putting Iluka's mineral sands operations and strong balance sheet at risk. That is very important, not least because of our substantial agenda and progress made in the mineral sands business. Market conditions across our zircon and titanium dioxide product suite remained very tight, including as a result of industry challenges associated with declining supply from existing operations. For several years now, Iluka is positioned actively to lead in response to these industry challenges with our approach underpinned by a number of key actions. We have and continue to foster a sustainable pricing environment for our products with our customers increasingly prioritizing security of supply. We have, since April last year, returned our operations to maximum settings, and this has occurred alongside improved safety performance and the ongoing impact of COVID-19. We have been and continue to be in the process of executing our nearer-term supply response for zircon. That relates to our sales of zircon-in-concentrate, which increased by 47% in 2021. For titanium dioxide, preparations for the restart of Synthetic Rutile Kiln 1 at Capel are progressing well, with the kiln to commence processing feedstock by year-end. And insofar as their longer-term supply response is concerned, we have and continue to make important progress throughout our major project pipeline. This is centered on a conscious effort to pursue the development of more technically challenging deposits here in Australia, and I'd highlight the Balranald and Wimmera projects as examples of our progress. I'd also add that the development of Eneabba Phase 3 further enhances Iluka's competitive advantage in mineral sands. As I mentioned earlier, the refinery will have the capability to process a broad range of rare earth feedstocks. Within Iluka's portfolio, this obviously includes the Wimmera development, which is a potential multi-decade source of both zircon and rare earths. But Phase 3's capability also includes the monazite and xenotime minerals that are present in essentially all mineral sands deposits and produced routinely as byproducts of the mineral separation process. In the case of Balranald, for example, which is predominantly a rutile, zircon and ilmenite development, Phase 3 provides a certain pathway to value addition and market for its not insignificant monazite and xenotime credits, further enhancing the project's economics and the economics of the refinery. This, again, underscores the logical, adjacent, strategic, rationale for Iluka's diversification into rare earths. It also underscores, I think, the significant work and capital allocation priorities we have ahead of us in Australia, which will require disciplined focus if we are to be successful. In no small part, the requirement for that disciplined focus and prioritization has informed the decision that we've announced today to pursue a demerger of Sierra Rutile subject to shareholder approval. Sierra Rutile has demonstrated improved performance throughout the second half of 2021, and that improved performance has continued in 2022. The business benefits from robust sustainability frameworks that have been implemented during Iluka's ownership, with a focus on safety, environmental management, community relations and anti-bribery and corruption. Further, the recently ratified adjustments to Sierra Rutile's fiscal regime and the favorable outlook for the high-grade titanium dioxide feedstock market all place the business in a strong position as a stand-alone entity. So a demerger will enable both Iluka and Sierra Rutile to reach their full potential. It also offers investors the opportunity to choose their desired exposure to each business based on their individual preferences for differing geographical exposures and risk return profiles. Coming back to where I began, it's been a very important year. Ultimately, this is a reflection of the efforts of -- efforts and achievements of Iluka's people; and I'll conclude my address by thanking them for their substantial commitment to the company. I also once again extend my thanks to shareholders for their ongoing interest and support. I'll now hand over to our incoming Chairman, Rob Cole, to say a few words. Thank you.

Thank you, Tom. With your indulgence, and on behalf of the Board, I'd like to add our acknowledgment and thanks for Greg's leadership. Iluka's objective is to deliver sustainable value. And as you've just heard in today's addresses, Greg's contribution to this objective has been outstanding. In good times and bad, he's guided the company with a steady hand, inquisitive mind and inclusive approach, drawing on his more than 40 years of experience. If the measure of a Chairman's success is whether he leaves a company in better condition than he found it, then I think Greg's record, well and truly, will stand the test of time. The Iluka he departs is in a strong financial position. It's a leader in the mineral sands industry, with demonstrated corporate governance and sustainability credentials and has embarked on a potentially transformative diversification into rare earths. I'm both excited and humbled to succeed Greg at this critical juncture in Iluka's history. I look forward to continuing to work, on behalf of our shareholders, with Tom, our fellow directors and the broader management team. And true words whenever spoken, Tom, matching Greg's performance, chairing Board meetings and AGMs will be a tall order. I'll do absolutely everything in my power to try to live up to the substance of Greg's contributions, if not the style. And with that, I'll hand back over to you, Greg.

Now, well, folks, I guess you've now got a bit of an insight on what it's like to be Chairman of Iluka over the last little while. A tough bunch of people to deal with, but a great bunch of people, all the same. And I guess I was a little overwhelmed this morning with the kind of support that I've received from a great bunch of people both here and former directors over the years I've been on the Board. Well, and thank you very much, Tom and Rob, for your comments. Transcripts of both my address and that of the Managing Director are available on the company's website and the ASX company announcement platform. So ladies and gentlemen, we now come to the agenda items of the meeting. Each of the agenda items will now be considered in turn, with an opportunity for shareholders to ask questions before voting on each item. As mentioned, in accordance with the Corporations Act and the company's constitution, all voting today will be conducted by way of a poll. And as mentioned earlier, the poll is already open. As of the proxy close date, we have received proxies representing 314.4, that's 314.4 million shares or 74.1% of the company's issued shares. 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 31 December 2021. This item of business also gives shareholders the opportunity to ask questions about Iluka and its operations. Shareholders may also may ask questions of the auditor. And look, in 9 years, a question to the auditor today would just be fantastic. I have tried over and over, and it will be really nice. Helen is here. We have a representative from PricewaterhouseCoopers, and we paid them a lot of money to sort of do a good job for us, and pleased and just be delighted to have a question. So Geoff, I'm relying on you my friend. 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. And so with some trepidation, I will now open the meeting to any questions or comments of shareholders. If you have a question that relates to the other items of business, including remuneration or the grant of securities to the Managing Director, I'd ask that you hold your questions until we reach those agenda items. So are there any questions or comments on this item of business from the floor? Mr. Reid, you do me a great service this morning. Thank you.

Good morning, Chairman and fellow directors. Thank you, Mr. Chairman, for your address, and thank you for your 9 years of encouraging performance, excellent governance and engagement with the Australian Shareholders Association. My name is Geoff Reid, and I represent the members of the Australian Shareholders Association who granted me their proxy today. Welcome also to Rob Cole, and I know you've got a hard act to follow, but I wish you well and hope you succeed for all of us. Mr. Chairman, I would like to ask you 2 questions today, and they're pretty easy ones, and I'm sure you're more than capable of dealing with them in short order. Firstly, I'd like to ask about climate change goals and action plans. Will the Board press the executive team before the next AGM to develop a climate change action plan with goals and targets to get the company to zero net emissions by 2050 or earlier? And will you set a big intermediate goal along the way, say, a 30% reduction by 2030? Question one. Question two. Please, can you advance the dividend payment by about 3 weeks? The dividend used to be $0.02. This year, it's $0.12. Great to see the change in policy. Thank you for that. You're not the slowest payer on the market, but neither are you the fastest. And if you could please achieve a dividend payment earlier, you could do this by perhaps declaring the dividend a week earlier, setting the X date 2 weeks earlier, moving to a 5-day weighted average price for the DRP instead of a 10-day average price. And if you ask Rod Somes and the directory nicely -- the registry nicely, they might be able to pick you up a couple of extra days to get it to less than 3 weeks. Thank you.

Thanks very much, Geoff. I mean I have very much enjoyed our association over the last 9 years, including our meeting together as we did a week or so ago, along with Rob Cole, to talk about the company's performance. Let me deal with the latter one first, and let me preface that by saying in about 24 minutes from now, I have absolutely no authority at all in relation to Iluka because as the law rises at the moment the AGM concludes and I call the meeting to an end, that will be it and I'll be yesterday's fish and chip paper. But in relation to the question you asked on dividend, it's a very fair one. It's in fact -- in fact, Jenny Seabrook is in the audience today. And you might remember, Jenny. In my first meeting, I was going, what the h*** is it between -- sort of Tom, he sort of declared and -- sort of called or closed sort of the record for paying of dividends. Your comment and your request is a fair one. And I'm certain that Tom and the rest of the Board will take that on and give that due consideration. And I can tell you, as an Iluka shareholder, I'll happily support any sort of advancing of the payment of dividends because it is our money after all, right, Geoff. So look, that one we will take on board.

Thank you, Chairman.

On the issue of climate change, look, it's a very important question. I mean all of us are parents or grandparents or have family members who have got kids, and providing a world for them to enjoy as we have enjoyed is incredibly important. We have the technology, we have the capability available to do so. And I've been a great advocate for the move and the energy transition that's on. And in fact, part of what I do, I play a very active and perhaps more role in advancing that because it is important that we do so. However, in doing so, I think it's absolutely important that we are credible as an organization in doing that. I think your shareholders are well aware that one of the largest contributors -- contributions that we make to our carbon footprint is down in the south. It's with our kiln. Kilns operate in a particular way. They're pretty big and pretty simple beasts, but they require anthracite as a medium in which to beneficiate ilmenite into synthetic rutile. And it is a matter that we are looking at because quite frankly, at the moment, there is nothing, nothing yet available on the horizon to change that. But it is something that the team at Iluka continues to look at very closely, along with what we might do in terms of the buy-off offsets to offset that activity. As a company and as a Board, we have over the recent years, very much moved to adopt the TCFD's protocols in relation to climate change. And we've reported, I think, faithfully to shareholders in our Sustainability Report the progress that we've been making in that regard. There is still more to be done. But the Board has been very reluctant to come out and to make comments or to make aspirational projections, which some might see as being nothing more than greenwashing. And Australians have the biggest -- what matters in the world, they get and they hear things that aren't real. And we as a company are very concerned to ensure that when we do come out with targets, with goals, with aspirations, there are things that we believe that we can achieve and to actually make a difference. And that journey continues for us. Some would like it to go faster. But I can assure you from all the discussions that we've had around the Board table under Rob and Tom's leadership, I know they'll be matters that will be given very serious consideration. And when the company is in a position to do so, I have no doubt we'll come out and we'll do just as you've asked.

So would you foresee that being before the next AGM, Chairman?

In 24 minutes, that will really be a matter for Rob and for Tom. And as always, I'm sure they'll welcome a dialogue with you in relation to that request.

Thanks, Chairman, and farewell.

Yes. Thanks so much, Geoff. Thank you. Now are there any more questions from the floor on the financial reports or the management of the company over the last 12 months? Do we have any more in the room? No. So Ben, let me turn -- are there any questions or comments that have come online.

No, Greg, there are no questions online.

Are you sure we're connected to the outside world?

I'll refresh my browser, but I can confirm there are none online.

Thank you. Excellent Company Secretary, and I would tell you. We'll now move on to the next item of business. I'm sorry, Geoff?

Another question, Mr. Chairman.

Please do. Thank you.

I didn't want to hog the proceedings, but if nobody...

If you want to prolong my time as Chairman, that's fine.

I might make it 26 minutes. I suppose the question is about SRL. I believe we've invested about USD 1 billion in SRL with the purchase price and the CapEx over the years we've owned it, and it's regrettable that it's come to the demerger because I think it's now valued in the Iluka account at a big round 0. So that's sad to see. But recriminations aside, you took me a bit by surprise with that announcement this morning, Mr. Chairman. And I'd like to ask how we're going to deal with the World Bank shareholding through the International Finance Corporation because my memory is that they own 10% of SRL that they bought for a very modest amount. And how are we going to demerge it and list it on the ASX without their cooperation?

Yes. Geoff, let me ask the Managing Director to complete the answer. So we certainly -- even with CapEx from our initial acquisition costs, haven't spent $1 billion, and Tom will correct that number and we'll also update you on where we are with the IFC because there are some developments to report to shareholders.

Thanks, Chairman. Yes. Thanks for the question, Geoff. On the IFC, I think we've disclosed in the release that IFC will be exiting the -- its holding prior to the demerger. And in the documents to come, the demerger booklet and so on that will disclose details of that exit.

You can't share with us today how and why they're exiting?

They're exiting to really to facilitate the demerger.

Have you bought them out?

We'll be disclosing the details in the booklet. But yes, we are buying them out.

Okay. Thank you. Thank you, Tom.

Thanks, Geoff.

Thanks for the question, Geoff. It is an important one. And obviously, in making the announcement today that we are pursuing the demerger of the company, all of those what you might call red flag issues have been addressed. We're not over the line yet. There's obviously a due diligence process to complete before finally bringing it to shareholders via a demerger booklet. But I'm confident that all of those red flag issues have been addressed adequately so that none of them would preclude us pursuing a demerger if at the end of the due diligence process, we're of the view, it's still the right thing to do to consummate, again, with the support of our shareholders. Okay. The next item of business is the reelection of Marcelo Bastos, which is Resolution 1 in the Notice of Meeting. Details of Marcelo's qualifications and experience are set out in the Notice of Meeting. Marcelo was appointed to the Board February 2014, isn't it? Just seems like yesterday, Marcelo. Didn't time fly? We don't look any older, I'm sure. Marcelo was considered by his fellow directors to be an independent director. He was last reelected at the 2020 AGM and retires by rotation at this meeting in accordance with the company's constitution. In accordance with Article 17.1 of the constitution, and being eligible, Marcelo offers himself for reelection. Having reviewed Marcelo's performance, the Board considers his skills, experience and, in particular, his significant leadership and international experience in mining operations, major projects development and business strategy in the resources sector as valuable to the Board and to Iluka's long-term sustainable success. Marcelo is a member of the Audit & Risk Committee, Nominations & Governance Committee and the Sustainability Committee. The Board, with Marcelo abstaining, unanimously support his reelection. I'd now like Marcelo to address the meeting. Thank you, Marcelo.

Thank you, Greg, and good morning, ladies and gentlemen. I'm pleased to have this opportunity to address you in relation to Resolution 1, concerning my reelection to the Board. I've worked in the mining industry for over 35 years and have been on the Iluka Board for the last 8 years, as Greg said, with this being my third stand for reelection. I commenced my career with Vale back in 1985, where I worked in various commodity sectors and operations, leaving Vale as the Director of Nonferrous Operations. In 2004, I joined BHP Billiton at the time 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, an asset of about $10 billion value. I retired from my executive career in 2017. Since then, I had served as a Non-Executive Director on the Boards of OZ Minerals until 2019 and Golder Associates until 2021. Currently, in addition to Iluka, I serve on the boards of Aurizon Holdings, the largest rail company of Australia, and Anglo American PLC, a major global diversified mining house based in London. I also sit on the technical advisory board of Sumitomo Corporation nickel business. For the last 8 years, I have supported management and my fellow Board colleagues in building Iluka further during a time of adverse price trends, sometimes difficult changes and now new opportunities in the marketplace. As a mining company, Iluka focuses on delivering value for its shareholders. So the value I bring to the Board is over 35 years of experience and knowledge in the global mining industry. including operational, major projects and company management. It's my privilege to be on the Iluka Board. I welcome the opportunity to continue bringing to Iluka my global connections with the mining world, coupled with my skills and passion for sustainability, providing Iluka with an extensive and contemporary understanding of the mining industry in Australia and globally. Thank you.

Thanks. Well, ladies and gentlemen, Iluka is very fortunate to have a director of Marcelo's caliber around the Board table. He is a truly genuine international mining executive and non-executive director. And we benefited greatly at each meeting from the ideas that Marcelo brings from all around the world, the very latest and the very best. And if you look at Marcelo's qualifications and experience, his skills, his love of Iluka as much as I have, as we move forward and to build the refinery, Marcelo's skills will be invaluable to the Board and to shareholders, certainly my opinion anyhow. I'll now open the meeting to any questions or comments from shareholders. Are there any questions or comments from -- on this item of business from the floor? Well, Ben, what about any comments or questions from online?

None online, Greg.

Okay. Not certain online, but we'll see. Given that there are none -- there are no items. I'll then ask that, that concludes the item of business and to ask shareholders to please cast your vote on this item, whether you're doing so here on the paper, green paper or yellow paper slip that you have or on the online facility for those who are joining us in that form. [Voting]

So the proxies that have been received in relation to this item are shown on the screen. And Marcelo, I think I can say without sort of tainting the voting process that you might have just managed to scrap over the line. So on behalf of the Board and shareholders, congratulations on your reappointment.

Thank you.

The next line of business asks shareholders to adopt the company's remuneration report for the year ended 31 December 2021. It's Resolution 2 in the Notice of Meeting. Whilst this is a nonbinding advisory vote of shareholders, the views and comments of shareholders will certainly be taken into account by directors when further considering remuneration matters. I note that a voting exclusion applies to this resolution as set out in the Notice of Meeting. I now invite Rob Cole, as Chair of the People & Performance Committee, to address the meeting. Thanks, Rob.

Thanks, Greg, and good morning again, everyone. I'm pleased to present the 2021 remuneration report to you. As the Chairman and Managing Director have outlined, 2021 was a very strong year for Iluka. We've been able to deliver disciplined financial performance across -- sorry, disciplined performance across all metrics in the group's scorecard, resulting in one of the strongest financial performances in Iluka's history. In addition, really significant progress was made in relation to our growth projects and studies including the rare earths initiative, culminating in our announcement last week to proceed with Eneabba Phase 3. We believe that the outcome set out in the report are reflective of these considerable achievements and performance, which have in turn been reflected in the considerable growth in our share price over the past year. As outlined in the Notice of Meeting, under Resolution 3, the Managing Director's executive incentive plan outcome will be delivered entirely in equity. Thank you for your support. The Chairman or I would be happy to address any matters arising from shareholder questions. Back to you, Greg.

Well, thank you very much for those comments, Rob. I'll now open the meeting to any questions or comments from shareholders. So are there any questions or comments on this item of business from the floor? Let's start with -- floor is not actually a good place to start, Ben. I think maybe next time we'll sort of start with online, and [ give ] the room a bit more time to think about questions there. I don't mind if we mix up a bit.

Well, we do, in fact, have a question online, Greg.

Excellent. So why don't we do that then?

So this question is from [ Mr. Stephen Mayne ]. And the question is as follows: "Did any of the main proxy advisers, ACSI, Ownership Matters, Glass Lewis and ISS recommend a vote against any of today's resolutions? Which of the proxy advisers are covering us? And has there been a material proxy protest vote against any of today's resolutions? Will you disclose the proxy votes before the debate on today's resolutions so shareholders can ask questions about the reasons if there have been any protest votes?"

Thank you, Ben, and good morning, [ Stephen ], and welcome to the meeting. What I can say about the proxy advisers reports, they were consistent and unanimously so in supporting all resolutions at today's meeting. So I think that answers that question. And yes, as is my practice, we will, in fact, when we ask folks to vote on the item of business, the proxies will appear on the screen. So you will be aware of what that vote is from proxies as shareholders who have not yet voted, get to do so either here in the meeting or online through the wonders of modern technology. Any other questions, Ben?

Greg, yes, we do have another question, again from [ Mr. Stephen Mayne ]. The question is as follows: "Given the interesting discussions across a range of topics today, could the Chair undertake to make an archived copy of the webcast, plus a full transcript of proceedings available on the company's website? Will you commit to publishing a transcript from today plus a back catalog of AGM transcripts so investors can access a full history of debate at the most important governance meeting of the year? The likes of Nine, AGL and ASX all produced their first AGM transcripts last year. Will you follow suit today?"

Yes. I can say no reason, [ Stephen ], why we wouldn't do that. This is a very transparent organization. And as you heard from my remarks earlier this morning, we got a pretty good pass grade in terms of our observance of their continuous disclosure obligations. And if that would help our shareholders in better understanding the full context not only of through the addresses that we've always published of the Managing Director and the Chairman, I can see no reason why we wouldn't do that. And I very much sort of take that on board and pass that perhaps on to you, Tom, to take on with the team, but I can see no reason why we would not do that. Pretty easy going. [ Stephen ], you've got a third one that I can sort of disagree on?

Greg, there are no more questions on this item.

Yes. All right. Thank you. And then very much, Stephen, thank you for your attendance and participation at the meeting today. Well, I think that does conclude the discussion on this item of business, and I'd now ask you to cast your vote on this item. The proxies received are indeed shown on the screen. I can see that we have some work to do, folks. Let's see. Was it 0.82%? As you'll see, the results on the screen show that at least 75% of the votes validly cast on Resolution 2 were cast in favor of the adoption of the remuneration report. I would just allow a little time for folks who have not yet voted to do so. I'll just have to say, I don't think it will change the outcome, but we'll lay that time. [Voting]

Now it brings us to the last item of business, which asks shareholders to approve the grant of share rights and performance rights to the Managing Director under the company's executive incentive plan on the terms summarized in the Notice of Meeting. The company's executive incentive plan was adopted in 2018 and combines the company's previous short-term and long-term incentive arrangements into a simplified annual incentive award. The plan drives performance against strategic, financial, production and sustainability metrics supporting the delivery of long-term sustainable value. From 2020, the outcomes from the executive incentive plan for the Managing Director are to be delivered entirely in equity, with 60% to be granted in share rights and 40% to be granted as performance rights. This resolution seeks shareholder approval for the grant of share rights and performance rights to the Managing Director, Tom O'Leary, under the executive incentive plan for the performance year commencing 1 January 2021. The purpose of this grant to Tom is to ensure that his interests are aligned with those of shareholders by providing him with the opportunity to be awarded an equity interest in Iluka, subject to the achievement of challenging performance targets. Further information regarding the 2021 performance scorecard outcome is set out in Iluka's remuneration report on Pages 76 to 78 of the 2021 Annual Report. The Board, with Tom abstaining, considers the grant of share rights and performance rights to the Managing Director to be appropriate and recommends that shareholders vote in favor of Resolution 3. I note that a voting exclusion applies to this resolution as set out in the Notice of Meeting. I'll now open the meeting to any questions or comments from shareholders. Are there any comments from -- on this item of business from the floor? If not, I'll then ask Ben, do we have any questions online?

We do, Greg. We have a question from [ Mr. Stephen Mayne ], and the question is as follows. "When disclosing the outcome of voting on all resolutions today, including this LTI grant for the CEO, could you please advise the ASX how many shareholders voted for and against each item, similar to what happens with a scheme of arrangement? This will provide a better gauge of retail shareholder sentiment on all resolutions and was a disclosure initiative adopted by the likes of Metcash, Altium and Dexus after their 2021 AGMs."

Yes, I'm happy, [ Stephen ] to take that question on notice. Again, I can see no reason why we would not do so, but allow me to take that question on notice, particularly given the circumstance in which I am, as a retiring Chairman of the company, but we will very much take that on. I can assure you and Rob Cole and the Board will consider that request following the meeting. Any other questions?

There is one other, Greg, from a shareholder, [ Mr. Stephen Mayne ]. The question is as follows, "If we had kept the $13 million in JobKeeper, would this have impacted on the CEO's LTI grant vesting? Could the CEO comment on the intersection between his pay and the JobKeeper situation and outline what feedback he received about our decision to shun the widely rated scheme?"

I can assure you that in calculating Managing Director's rewards for that year, we excluded the $13.6 million. We would have done so at any rate, had we kept it or not, but it was, I can assure shareholders and you, [ Mr. Mayne ], that it was excluded. Tom, up to you if you'd like to comment on the second question.

Yes. I mean the question was directed at the LTI, and the LTI, that's on the base of relative total shareholder return. So no, it wouldn't have had any impact. But in terms of feedback around our decision, it was very positive. The decision to return the JobKeeper payments, very positive levers received by all our stakeholders.

Yes. And I think just to add to that, we were one of the early companies to do so, recognizing that our circumstances we're not going to be as dire as we thought they might have been. I mean it's easy with a benefit of hindsight, but I can assure shareholders that in that period, late March through April and May of 2020, when the world was coming to terms with what this thing called COVID-19 was all about, we were very, very concerned for the company and for our ability to ensure that we can maintain our workforce. And so we obviously availed ourselves of something that we have not asked for which the government made available. But which very quickly in recognizing our circumstances would be different and not as dire as we thought. Without hesitation, I can still, to this day, remember the phone call I got from Tom on a Sunday morning saying, "We don't need this. It was provided by the government for a particular purpose, for organizations to do a particular thing, which was to ensure that they maintain connection and connectivity with their workforce." And once it was clear to Tom that we were able to do that without having to continue to avail ourselves of that, we very quickly said, not for us and returned it, and I've got to say I'm incredibly proud of the decision that we made. And we weren't forced, we weren't embarrassed into it. It was something we did because it was very simple. It was the right thing to do. Thank you for the question, [ Mr. Mayne ].

Sorry, Greg, we have now received one further question on this item from [ Mr. Stephen Mayne ]. And the question is as follows: "Why not disclose the proxies on this item before the debate as that is ASA policy and best practice in the market? Will you consider lodging the proxies with the formal addresses ahead of next year's AGM as NAB, Afterpay and AusNet agreed to do last year following a written request from me? This will give us more time to prepare follow-up questions where there has been a meaningful protest vote."

Yes. Happy to take that on notice again, [ Mr. Mayne ].

There are no further questions online, Greg.

Thank you. So ladies and gentlemen, that does conclude the discussion on this item of business. And I'd now ask you to please cast your votes on the item. The proxies received are shown on the screen. For shareholders in the room, if you have any questions regarding your green voting card, please raise your hand and someone from Computershare will come over and assist you. So Rod's now moving around the room, and I'll ask all persons voting, please place your green voting card in one of the Computershare voting boxes. And if you do have any questions at all, please raise your hand and Rod will get to you, and I'm just going to leave and return for a moment to complete my card. [Voting]

You know you're getting old when you've done this 9 times and I still got to ask Rod did I do it right. Apparently, I did, in fact, I did with my new titanium pen that I was given last night as a little going away present from Iluka, which is very nice, I'd tell you. Geoff, if you do the right thing, mate. All right. Has everybody who intends to vote voted? I can ask that question of those here in the room. There's no way we can have sort of little winks or what have you from online, is that then, sort of which you do in a meeting. You're sort of happy with the item of business, you throw a little wink, you know. So I appreciate everybody online. It's now done. And given that everybody here in the room has completed their voting cards, I will now declare the poll closed. Well, ladies and gentlemen, that concludes the proceedings of today's Annual General Meeting. I'd like to thank you all for your attendance and participation at today's AGM. I now formally declare the meeting closed, subject to finalization of the poll. 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. For shareholders at the venue, light refreshments will be served outside. I'm just hoping that there are scones and tea jam for those who might remember an Annual General Meeting of a few years ago, but we'll see when we get outside. Let me now take the opportunity -- it's a great opportunity for you to meet with the company's directors and members of the management team and staff that are here, and I would certainly encourage you to do so, and I look forward to you joining us outside. As for everybody else, thank you for your attendance at today's meeting and stay safe. Thank you.