Photo by: Bloombeg
PERTH (miningweekly.com) – Mineral sands producer Base Resources has received a force majeure notice from an ilmenite buyer, seeking to suspend its obligations under an offtake agreement.
Under the terms of the agreement, the counter-party was due to purchase some 100 000 t of ilmenite by June this year, at an average price of $116/t, which was a significant premium to the current market price.
The 100 000 t/y agreement applied for a further three years from February 1.
However, Base said on Wednesday that the company had received a notice from the purchaser in response to an incident that occurred and caused significant delays in the commissioning of the counterparty’s slag furnace.
While providing a preliminary assessment of the extent of the damage caused by the incident, the notice advised that repairs, further damage assessment and rectification works would be required and that the duration of the delay was not known.
Base told shareholders that the company was assessing the potential impact of the notice, as well as its rights.
In the meantime, the company would explore all available options to sell the ilmenite to other customers.
Base started exports from its Kwale mineral sands project, in Kenya, in 2014 and the mine was being ramped up to produce 80 000 t/y of rutile, 360 000 t/y of ilmenite and 30 000 t/y of zircon. An optimisation push at Kwale was expected to increase the mine’s combined ilmenite, rutile and zircon output beyond 460 000 t/y.