ILUKA Resources, the world's largest pure-play mineral sands miner, stormed back today to first-half net profits of $145.9 million, as rebounding prices and tight global supply boosted margins.

The miner had a loss of $6.6m in the previous year.

Iluka, whose titanium dioxide and zircon products are used in the paint, toothpaste and tile-making industries, saw sales revenues collapse by 36 per cent during 2009 in the wake of the financial crisis, and chalked up $171m of accumulated losses before a recovery started to set in during the latter half of 2010.

But the company is seen as a late-cycle beneficiary of the construction boom in emerging economies, and has negotiated price rises of as much as 75 per cent from mineral sands consumers in recent months. It reported full-year earnings of $36.1m in 2010.

Iluka is the world's largest producer of zircon and second-biggest producer of titanium dioxide feedstocks, such as rutile, synthetic rutile and ilmenite. The company accounts for 34 per cent and 18 per cent of the two markets, according to a September 2010 presentation.

The company said supply remained tight for zircon and its titanium products, although some substitution and hoarding was being seen in zircon as consumers switched to cheaper products.

Iluka's board declared an interim dividend of 20 cents, compared to 23.6c predicted by the analysts. No interim dividend has been paid since 2007, but 8c was proposed at the annual results earlier this year.

Managing director David Robb pledged at the company's annual general meeting in May to return most free cash to shareholders in future.

Zircon and titanium dioxide are expected to benefit from residential building in emerging economies, such as China's five-year plant to build 36 million affordable homes by 2015. While steelmaking materials such as iron ore and coal benefit from the early stages of construction booms, tiles and white paint are commonly used in finishing off new buildings.

In a production report last month, the company said that mineral sands output during the period had come to 795,300 tonnes, up 16.7 per cent from 681,300 tonnes the previous year.

Consolidated production costs came to $549 per tonne, while selling prices ranged from $640/tonne for synthetic rutile to $1600/tonne for zircon over the half-year.

Revenue in the period came to $616.3m, up 45.3 per cent from $378.6m the previous year.