The pricing for the mineral sands product suite continued to improve throughout 2017, with the zircon market in particular benefiting from improving demand dynamics and emerging supply-side shortfalls, says mineral sands miner Mineral Deposits (MD).
Further, within the high-grade titanium dioxide industry, an increase in titanium dioxide demand this year has been forecast.
“The seasonal slowdown in pigment production experienced during the northern hemisphere winter was not as pronounced as usual, with western pigment producers continuing to operate at high utilisation levels, owing to higher demand and tighter supply in Europe and North America,” MD stated in its full-year results report, which was published last month.
Meanwhile, the restart of idled feedstock capacity and improving spot prices for rutile are strong indicators of strengthening market conditions in the high-grade titanium feedstock sector, which bodes well for MD’s asset TiZir’s titanium feedstock sales outlook.
MD has a 50% interest in TiZir, which owns integrated operating assets, the TiZir titanium and iron ilmenite upgrading facility (TTI), in Tyssedal, Norway, and 90% of the Grande Côte mineral sands operation (GCO), in Senegal.
GCO is a large‐scale, cost competitive mineral sands operation that is fully integrated from mine‐to‐ship, using owned or controlled infrastructure. GCO started mining activities in March 2014 and, over an expected mine life, currently projected to 2050, is producing high-quality zircon and ilmenite.
A majority of GCO’s ilmenite is sold to TTI. GCO also produces small amounts of rutile and leucoxene. The government of Senegal is a valued project partner, holding a 10% interest in Grande Côte Operations SA.
MD further stated that zircon pricing levels improved above expectations throughout the second half of last year and into the first quarter of this year. While demand remains strong, supply shortfalls are having a material impact on the market.
“This situation continues to place further upward pressure on zircon pricing, particularly for high-quality zircon with low impurities, such as that supplied by GCO,” according to the company.
GCO started production of medium-grade zircon sands (MGZ) last year, which is a zircon concentrate not previously included in GCO’s product suite, producing 20 200 t by year-end. Total finished goods production for GCO in 2017 was 584 200 t, an increase of 22%, compared with 2016.
The company explains that owing to increased production and strong demand for GCO products, sales volumes for last year were significantly higher than 2016, with ilmenite increasing by 12.9%, zircon by 14.3% and rutile and leucoxene, combined, by 16.3%. MD noted that the MGZ product added a further 18 300 t to finished goods sold during the year.
TiZir’s key focus for 2017 was to improve operational consistency, deliver production and cost efficiencies at GCO and ensure the safe and successful ramp-up of production at TTI to achieve a return to positive cash flow generation, the company highlighted in its 2017 full-year results.
“GCO demonstrated improvements in all key metrics throughout 2017, leading to improved production performance and strong financial results for the year. Compared with prior year results, production improvements at the mine were reflected in increases in ore mined, operational runtime and average throughput.
“On an overall basis, heavy mineral concentrate (HMC) production for the year was a record 724 800 t, a significant increase of 18.1%, compared with 2016,” the company highlights.
Consistent with increased HMC production, finished goods production at the mineral separation plant reached new highs in 2017, led by ilmenite production of 492 400 t and zircon production of 61 600 t.
MD’s focus for this year will be to continue the strong production performance at TiZir by consolidating and optimising production processes at GCO and TTI. It will also enhance cash flows and maintain balance sheet discipline to improve TiZir’s capital structure, consider opportunities to capitalise on TiZir’s asset base and further capture the benefits of an improving market.
“Last year was a year of hard work ultimately leading to a number of outstanding results for the company,” MD Robert Sennitt commented, adding that the platform established in 2017 and plans already in place for 2018 “strengthen MD and TiZir’s capacity to take advantage of improving market conditions”.
Last month, a gearbox failure at TTI, however, resulted in the need to shut down the pre‐reduction kiln.
MD explained that an early prognosis is that the kiln could be off line for a period of about six weeks. The furnace is expected to continue to operate during this period, albeit at reduced levels, with TTI management considering various strategies to mitigate the lost production, the company stated.