JOHANNESBURG (miningweekly.com) – Shares in ASX-listed Alkane Resources jumped 23% on Tuesday after the multicommodity mining company announced it had signed an exclusive worldwide marketing, sales and distribution agreement for all zirconium produced by the Dubbo zirconia project, in New South Wales.
Alkane, which fetched A$0.32 a share on Tuesday, from the previous day’s close of A$0.27 a share, will sell zirconium to UK-based Minchem, a technical ceramics marketing and manufacturing business that has been involved in zirconium chemicals and zirconium dioxide products for over 40 years.
The Dubbo project is expected to produce 16 000 t/y of zirconium products, which includes zirconium dioxide, speciality zirconium chemicals and other value-added zirconium products. At full one-million-tonne-a-year throughput capacity, the project will deliver zirconium revenue of between $100-million and $120-million, equating to about 30% of the total project revenue.
Alkane reported that the agreement with Minchem provided it with an experienced partner to market the Dubbo zirconium products directly to key end-users in all major markets.
“The Dubbo zirconia project is not dependent on zircon or China, which is a major advantage for many customers,” commented Minchem MD Charles Skidmore.
The zirconium market is dominated by the production of zirconium silicate (zircon) mined in conjunction with titanium minerals, ilmenite and rutile from mineral sands operations. China is responsible for about 80% of all zirconium production, despite depending on imported zircon as the raw material. China dominates zirconium oxychloride (ZOC) supply, with over 90% of global production. Remaining ZOC production is located in Russia, England, India and Vietnam.
Alkane said that the zirconium market was forecast to register compound yearly growth of 5%, with the zirconium market set to reach 190 000 t/y by 2020 and 240 000 t/y by 2025.
The Dubbo project will represent 8.6% of the zirconium market in 2020.
Edited by: Creamer Media Reporter
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