COMMODITIES FOCUS: MINERAL SANDS
The mineral sands industry has bounced back from low prices between 2013 and 2016, as a lack of new mines in recent years constrains supply. This is having a major impact on commodity prices and sales volumes.
ILUKA Resources managing director Tom O’Leary said current robust market conditions could strengthen even further.
By the March quarter last year, industry leader Iluka had reported a 130 per cent increase in total zircon, rutile and synthetic rutile sales volumes relative to the same period in 2016, due to its $389m acquisition of the Sierra Rutile mineral sands operation in Africa.
“The most recent $130 per tonne [zircon price] increase, effective 1 October 2017, which I can confirm, has been accepted into the market, has been stated as effective through Q4 2017 and Q1 2018,” Mr O’Leary said.
Mr O’Leary said the lack of significant, high grade discoveries would continue to drive pricing up.
“In broad terms the quality of the deposits currently being investigated for development are lower grade, and lesser quality than those currently being exploited,” he said.
“There’s less zircon, less rutile, less valuable chloride ilmenite and there’s more trash.
“There have been no discoveries of significant higher-grade deposits in the last decade.
“So projects like our fine minerals project and other higher cost projects are required. “This will, over time, drive pricing up.”
A 40 per cent share price gain by March 2017 for Iluka has spurred juniors to accelerate the development of their respective projects, most of which are in WA.
Projects On The Horizon
Emerging mineral sands producers such as Strandline Resources are looking to take advantage of buoyant prices.
Strandline has launched the hunt for a joint venture ( JV) partner to oversee the funding, development and operation of its Coburn project in WA.
Coburn is fully approved, development-ready and defined by a resource estimate of 979 million tonnes (mt) at 1.26 per cent heavy minerals (HM).
Another WA developer, Sheffield Resources, has secured a $US200 million funding for its Thunderbird mineral sands project in WA’s Canning Basin, and pre-construction works are currently underway.
Thunderbird has one of the world’s largest and highest grade zircon and ilmenite rich ore reserves, with a resource of 680.5mt at 11 per cent HM over a 42 year mine life.
The project will provide between 200 and 300 jobs during construction later this year.
Iluka has also approved the development of its Cataby project near Perth.
Cataby has resource estimate of 13.8mt at 4.4 per cent HM over an 8.5 year mine life.
Iluka is also looking to restart its JacintaAmbrosia mine in South Australia, which it mothballed in February 2016.