JOHANNESBURG (miningweekly.com) – Aim-listed mineral sands producer Sierra Rutile on Wednesday announced that it had entered into a 50 000 t rutile sales contract with a major pigment producer.

The contract would be fulfilled through a number of shipments scheduled to take place before March 31, 2014, with the volume split evenly between the fourth quarter of this year and the first quarter of next year, the company said.

"We are pleased to announce a sales contract of this significance. Despite the current market softness, rutile sales through 2013 will show significant growth over 2012 sales, as the company continues to see strong demand for its premium rutile product,” Sierra Rutile CEO John Sisay said.

Meanwhile, throughout 2013, Sierra Rutile had focused on maintaining cost discipline across its business.

The company, which confirmed on Tuesday that it was in discussion with other parties regarding its possible buy-out, had executed a series of cost-saving initiatives to optimise capital and operating cost efficiency, as well as to maximise its cash flow generation. 

Sierra Rutile also reassessed its production targets in light of existing market conditions, and was planning a slight decrease in its production for 2013 to 120 000 t of rutile, which was a 4% reduction on previous guidance.

“While we have slightly reduced our production target for 2014, owing to market conditions, I am pleased with the company's operating performance as we near the end of the year, which positions the company well for continued production growth in 2014, as the Lanti Dry Mining operation makes its first full-year contribution to production. 

“Our renewed focus on cost efficiency is yielding significant results and I am confident that further cost savings will also be realised during 2014," Sisay said.

Further, Sierra Rutile would complete the 2013 fiscal year holding a rutile inventory in line with historic levels and had already contracted over 75% of its production for the first quarter of next year.