Meanwhile, mineral sands miner, Iluka Resources, has warned that rutile production at its Murray Basin stage 2 project in Victoria will be lower than previously forecast.

The company told the ASX yesterday in a short statement that delays would see 2010 rutile production drop 10% from the forecast 180,000 tonnes made in February.

"This lower rutile production has been offset, in part, by higher than forecast production of other naturally occurring high grade titanium dioxide products, including Hyti and leucoxene, which are sold, like rutile, into high grade titanium dioxide end use markets," Iluka said.

"Zircon production from the Murray Basin in 2010 is expected to be in line with forecast."

Despite this news, Iluka shares rose 5c to $5.36 in a market that drifted in the red yesterday.

At Iluka's Jacinth-Ambrosia project in South Australia's Eucla Basin, regular shipments are being made as a result of on-schedule production.

Customer acceptance of Jacinth-Ambrosia zircon had been "highly favourable" Iluka said.

"Total zircon production sourced from Jacinth-Ambrosia for 2010 is expected to be approximately 150 thousand tonnes, underpinning confidence in the achievement of the expected full year 2011 production of 300 thousand tonnes," the company said.

Iluka said that demand for zircon and rutile had been strong in the year-to-date.

"The Jacinth-Ambrosia and Murray Basin operations are expected to contribute 80 to 90 per cent of Iluka's zircon and rutile production from 2011 and to display what are expected to be highly competitive revenue to cash cost (or cash margin) positions.

"On a year-to-date basis, and as will be detailed in the company's forthcoming Quarterly Production Report on 20 July, demand for both zircon and Iluka's high grade titanium dioxide products (rutile and synthetic rutile) has been strong.

"Iluka is allocating zircon volumes to customers given strong demand and the company's inability to meet all customer supply requests.

"Iluka's full year planned rutile production, and the majority of its planned synthetic rutile production, are contractually committed for 2010."