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Base Resources exceeds planned mining rate in September quarter

24th October 2019

By: Marleny Arnoldi

Deputy Editor Online

     

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ASX- and Aim-listed mineral sands miner Base Resources exceeded its 18-million-tonne-a-year mine plan by achieving mining rates equivalent to an annualised 19.6-million tonnes in the quarter ended September 30.

Additionally, mined ore grades improved throughout the quarter from an average of 1.8% heavy minerals in July to 3.6% heavy minerals in September.

In the quarter under review, which is the first quarter of the company’s 2020 financial year, Base successfully ramped up mining operations at the South Dune orebody, at the Kwale mineral sands operation in Kenya.

The company started mining on the northern fringes of South Dune, where grades are lower, resulting in reduced output of finished products; however, ore grades improved throughout the quarter as mining proceeded further into the orebody.

At the Toliara mineral sands project, in Madagascar, sound progress was achieved on all workstreams, with the project’s definitive feasibility study still on schedule to be completed in December.

Base expects production at Toliara to start in 2022.

Meanwhile, Base produced 73 808 t of ilmenite, 16 390 t of rutile and 6 980 t of zircon in the quarter under review.

The company maintained its production guidance for the 2020 financial year at between 64 000 t and 70 000 t of rutile, between 315 000 t and 350 000 t of ilmenite and between 25 000 t and 28 000 t of zircon.

MARKET VIEW
Ongoing constraints on the global supply of sulphate ilmenite and high-grade chloride feedstocks – including rutile – resulted in tight market conditions for titanium minerals and continued positive price momentum.

Chinese pigment production, no longer being materially encumbered by environmental inspections and shutdowns, had increased this year, which led to strong demand for ilmenite.

“It is understood that de-stocking by western pigment consumers had largely run its course by the end of last quarter. Global pigment producers had indicated that underlying demand for pigment remained firm, albeit not as strong as initially expected.

“Ongoing global economic uncertainties appeared to be leading to cautious pigment buying behaviour and a preference for consumers to maintain low inventory levels. However, demand was sufficient for most major chloride pigment producers to continue operating at high production levels,” said Base.

National and state government bans on private mining of mineral sands in India were expected to remain in place over the medium to longer term and would continue to contribute to significant quantities of ilmenite being removed from the market.

Base pointed out that no new ilmenite export quotas had been issued in Vietnam, which was continuing to impact on global ilmenite supply.

The emerging ilmenite deficit, created by strong demand and supply restrictions, continued to support a strengthening ilmenite price through the quarter.

Demand for Base’s ilmenite from existing customers remained greater than the company’s ability to supply and the company received additional enquiries from potential new customers globally.

Ongoing constraints on high-grade feedstock supply had supported price improvements for rutile.

Prices for Base’s rutile strengthened again in the reporting quarter with further improvements expected in the quarter ending December 31.

The zircon market came under renewed pressure throughout the September quarter, owing to ongoing global economic uncertainties.

Major global suppliers of zircon were reported to have offered price rebates and discounts to some customers for the remainder of the current calendar year. As a result, the price for Base’s zircon in the coming quarter had been contracted at a slight discount to the September quarter’s prices.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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