Heavy mineral sands miner PYX Resources started production and sales activity of natural rutile from its Mandiri deposit in central Kalimantan, in Indonesia, in January.
The rutile is being sold to customers in the country as a by-product of PYX’s primary zircon production operation.
The production and sale of other by-products, leucoxene and ilmenite, will follow in the second quarter of the year, states PYX CEO Oliver Hasler.
He emphasises that the first impact of selling rutile is a profit margin increase for PYX, which “is vital” for the company, as it has been absorbing all the mining costs for the zircon production at Mandiri.
“The sale of rutile, and in the future, ilmenite and leucoxene, is done at 100% margins. In the same way that we’re bullish on zircon prices, we believe that rutile prices will become stronger in the short term as rutile is a strategic product and there will be an important stress on price,” explains Hasler.
The company is waiting to be awarded an export licence to sell rutile. There is a significant difference between the Indonesian market and the export market in terms of rutile prices, and PYX will wait to be awarded the export licence before deciding whether to continue selling the rutile locally, he confirms.
The company’s rutile production and sales activity have followed from PYX’s increasing its mineral separation plant’s production capacity to 24 000 t/y in November last year.
Production capacity was lifted by 33%, growing from 18 000 t/y to 24 000 t/y, and the company had previously set a goal of reaching 48 000 t/y in the first phase.
“This increase of 6 000 t/y not only provides us with more mineral sands capacity but also enables us to dedicate some capacity to rutile and ilmenite, optimising our productivity.”
Hasler points out that the main market segments for PYX’s rutile include industries involved in welding rods, pigmentation and titanium sponge production.
“Titanium welding rods are used for applications where titanium properties are important for corrosion resistance. Titanium sponge is used for titanium metal and needs to be heated to form a titanium ingot, which can then be rolled into sheets. It’s also used to make tubing in the chemical plant heat exchanges.
“We’re just starting, and our volumes are too small for pigment sales and sales to sponge producers, so we will probably be focusing on welding rods.”
Further, the Australian government identified zircon, rutile and ilmenite as critical minerals last year. These minerals are considered vital for the economic wellbeing of the world’s major and emerging economies, and supply of these minerals may be at risk.
Hasler adds that supplying rutile enables PYX to contribute to the miner’s goal of net-zero emissions for 2050.
“Various technologies are essential to reach this goal, including solar cells, nuclear energy technology and engine catalysts, which use zircon, rutile and ilmenite in the manufacturing process. Zircon is also being used in modern technologies; it is becoming more prominent as a casing material for 5G smartphones and is used as a framework material for three-dimensional printing.”
With the global economy’s transitioning to decarbonisation, rising demand for zircon, rutile and ilmenite is expected to continue, consequently, “applying pressure” to the pricing of these minerals while supply is constrained.
“The announcement by the Australian government also opens up the door for us in terms of enticing an important category of investors – those who focus their investments on clean energy and related industries. In this way, we get investors that are interested in mining – mineral sands in particular – but also in clean energy investment,” he adds.
Hasler states that other governments’ possibly deciding to also declare certain minerals as critical to the energy transition could place further strain on supply in the future.
This motivates PYX to look for ways of growing the rutile, zircon, ilmenite and leucoxene market, and increase production to meet this expected demand.
“Since listing on the Australian Stock Exchange in February 2020, we’ve been focused on our growth, increasing our volumes, reducing the cash costs by starting our own in-house mining and beginning production of our by-products.
“We’ve also strategically tried to become a consolidator of the mineral sands industry in Kalimantan,” he concludes.