ILUKA Resources' Jacinth-Ambrosia zircon mineral sands mine in South Australia has commenced production ahead of schedule.

Capital expenditure on the project is expected to be less than $390 million, compared with an approved budget of $420 million, Iluka said in a statement.

With last month's completion of the Murray Basin Stage 2 project in Victoria, Iluka said it has now concluded its current major capital expenditure program.