PERTH (miningweekly.com) – South Africa-focused mineral sands producer Mineral Commodities will generate at least $60-million in revenue over the next five years from the sale of existing stockpiled garnet concentrate to offtake partner GMA Group.
Mineral Commodities and GMA have amended the existing life-of-mine (LoM) garnet offtake agreement, with Mineral Commodities now expected to supply garnet stockpile at a rate of 240 000 t for 2017, rather than the original rate of 210 000 t/y.
The company will revert back to the original contracted rate for the balance of the LoM.
In addition, GMA has committed to take delivery of 210 000 t/y of stockpiled garnet concentrate from 2017 onward, with Mineral Commodities to deliver this contracted offtake tonnage from its current garnet concentrate stockpiled at its Tormin mine, and from forecast yearly production.
Mineral Commodities said on Friday that the minimum revenue generated from the stockpile sale had been determined using a broad range of exchange rate and price assumptions, as well as garnet characteristics.
GMA has also agreed to pay for all historically incurred and future stockpile capital and maintenance costs relating to the increased stockpiling capacity required.