Handing down its September quarter production figures, Iluka's recorded zircon output for the third quarter was 107,767 tonnes, down 11.6% from September 2007 results.

Rutile production was down 9.6% on the same time last year to 49,874t.

Iluka said the decline reflected mining schedule and assemblage changes.

But while production was down from the same time last year, the latest results showed zircon output had risen 13.8% from the June quarter production.

Rutile output dropped 3.9% from the previous quarter while production of synthetic rutile boosted a hefty 36.7% from the June quarter to 135,982t.

Total mineral sands production for the quarter came in at 646,609t - down 9.2% on September 2007 output but up 9.2% on the June quarter.

Iluka said the restoration of WA gas supplies, after the disruption caused by the Varanus Island gas explosion in early June, was the main factor behind the overall increase in mineral sands production from the June quarter.

The drop in rutile was attributed to the lower contribution from Iluka-controlled Consolidated Rutile and the focus in the Murray Basin on zircon-rich deposits.

Echoing comments made yesterday the miner said it was unclear how the global financial crisis would impact demand for mineral sands but remained confident of Chinese demand.

Iluka did not state specific sales volumes but said rutile and zircon sales to China were "on trend" to deliver the miner its highest annual Chinese sales.

Iluka corporate affairs manager Rob Porter told MiningNews.net mineral sands supply remained tight while demand was strong.

Yesterday Iluka announced a $50 million net profit forecast for 2008.

Shares in the Iluka dropped 7.5% in intra-morning trading to $3.59, before lifting to $3.65.