Metallica Minerals and Melior Resources have announced a merger that will combine the two companies’ titanium, zirconium and bauxite assets, all of which are in Queensland, Australia.

Australian Stock Exchange-listed Metallica Minerals Ltd and Melior Resources Inc, currently listed on Toronto’s TSX Venture Exchange, announced on Thursday September 13 a binding agreement under which the two companies will merge their titanium, zirconium and bauxite assets.

All of the assets to be included are in the north-eastern Australian state of Queensland. The merger is taking place at a time when prices for zircon and rutile are high and there is a bullish outlook on ilmenite from Melior.

Metallica will bring to the deal its 50%-owned Urquhart heavy mineral sands (HMS) and bauxite projects, as well as its wholly owned Cape Flattery silica sands and Esmeralda graphite projects. Melior will bring its production-ready Goondicum ilmenite-phosphate project.

«Goondicum… has similar attributes to Urquhart bauxite in that it is fully funded and will be brought into production relatively quickly,» Metallica chairman Peter Turnbull said in the announcement.

The Urquhart bauxite project is not scheduled to begin production until after the 2018/19 wet season. This is during summer in the southern hemisphere, and runs from November to April.

Goondicum is located further south and is not affected by the wet/dry seasonality of areas further north. It is set to commence production in November this year, but is not expected to begin to generate an income until the second quarter of 2019.

The Goondicum project has had three operating phases – in 2007/08, 2012/13 and 2015. On each occasion, the project was finally put into care and maintenance, with the latest of these being blamed on poor market conditions. If the project is put into production again, a key objective will be to maximize throughput and improve product quality, so as to reduce costs and increase revenue.

Metallica’s HMS project and Melior’s Goondicum project are similar in that they both contain ilmenite. But the Goondicum project is not strictly a mineral sand deposit; rather, it is a unique «flat-lying residual oxide deposit of a weathered gabbro intrusion.»

But the ilmenite mineralization at Goondicum is not a hard rock, because it occurs as «liberated fine grains.» Additionally, while Goondicum depends for its success on the production of ilmenite and apatite, Metallica’s HMS project depends on zircon and rutile.

Industrial Minerals asked Melior’s director and chief executive officer, Mark McCauley, about the potential synergy between the HMS project and Goondicum. The HMS project was «clearly bread-and-butter for Melior,» he said, adding that while it is a small project, there is potential for exploration, and a mining lease has already been granted.
A preliminary economic assessment released in April 2018 gave the project an estimated mine life of nine years, at an average production rate of 160,000 tonnes per year of ilmenite.

This assessment was calculated by independent consultant TZ Minerals International (TZMI) with the use of a long-term ilmenite price forecast of $204 per tonne fob Australia. The ilmenite being produced at Goondicum would be a sulfate ilmenite containing around 50% TiO2, and is highly reactive, McCauley said.

This means that the company will look for customers among sulfate pigment producers in China, where ilmenite prices have been depressed in recent weeks due to a number of factors. Industrial Minerals assessed the price for ilmenite concentrate, 47-49% TiO2, cif China, at $170-180 per tonne on September 13, down from $185-195 per tonne on August 16.

While Metallica’s HMS project can begin production at short notice because it has a mining lease in place, the company’s website notes that no production has taken place because of depressed commodity prices. So far, no start date for production at the HMS project has been suggested.

This may change however, with the prices for both zircon and rutile rising on supply tightness and solid demand.
Industrial Minerals assessed the price for zircon, premium grade, min 66.5% ZrO2, bulk, cif China, at $1,410-1,710 per tonne on September 13, up from $1,030-1,100 per tonne a year ago.

The price for rutile concentrate, min 95% TiO2, large volumes for pigment, fob Australia, was assessed at $930-1,050 per tonne on September 13, up from $710-770 per tonne a year earlier.

Attendees discuss how market participants will secure supply for the coming year, and how prices are expected to perform going forward.

Raw material supply and market price performance were once again the leading topics of conversation among delegates at the 61st International Colloquium on Refractories in Aachen, Germany, in September.

As was the case in 2017, raw materials were under the spotlight at this year’s refractories event.

Considering the restrictions on mining and production operations in China – the largest producer of several key refractory raw materials such as bauxite, fused alumina, magnesia and graphite – attendees in Aachen are assessing what the future holds for supply.

«It’s the second year in a row that we’ve talked about, essentially, only raw materials,» one user said on the sidelines of the event. «If it’s not about bauxite, it’s about magnesia or it’s about alumina. But there is no running away from it.»

«The only consolation is that everyone is in the same situation because the changes are structural. The handicap is our common denominator right now,» another delegate said.

Consumers have actively been trying to respond to the sourcing issues in China by seeking alternative origins or by working with alternative materials.

This has not always led to workable solutions, however, because the tightness has, in some cases, spread to multiple markets, generating short supply and rising prices across the board.

«When bauxite was getting short and expensive last year, consumers tried to shift to andalusite instead,» one buyer said. «Of course, andalusite ended up being short and expensive too. What we hope is not having more of the same next year.»

Fastmarkets IM assessed the price of calcined bauxite 85% at $420-435 per tonne, fob Xingang, on September 20, compared with $410-420 per tonne on September 6.

The price of calcined bauxite 86% reached $435-445 per tonne fob Xingang on the same date, up from $420-440 per tonne earlier in the year.

The buyer pointed to similar situations with white-fused alumina and tabular alumina – when the rising demand for the first triggered a shortage of the latter as well during 2017.

The ongoing perception of impending shortage could also be a factor supporting market prices going forward, several attendees said, with uncertainty becoming the new norm.

«How much are the supply issues overplayed when it comes to contracting?» one trader said. «We know of China and of how serious what is happening there, don’t get me wrong. But is this creating knee-jerk reactions by market players? That may be.»

Cases of Damage to Refractory Linings and Ways to Avoid Them

New methods and the exchange of experience on reconditioning refractory linings in the event of their damage were the focus of the programme. A lot of scope was consciously given for the important technical exchange between attendees. The venue of the symposium, Tivoli, provided a charming setting for this and especially for the evening event with the Dresdner Salondamen, a musical ensemble.

Alkali resistance of refractories plays a role wherever alkali loaded gases or dusts have the chance to be deposited in the structure and to react with the refractory material, e.g. dust chambers or combustion chambers.

En esta ocasión nos centramos, entre otros, en la traducción del libro “Refractory Engineering”, tema del que  llevamos unas cuantas reuniones hablando y que parece que finalmente se va a va a llevar a cabo, debido a la importante que creemos que tiene disponer del libro en Castellano.

Otro de los temas que se confirmó fue la II Edición del Curso de Ingeniería de Refractarios, curso que tendrá lugar en Sevilla del 11 al 14 de marzo, esperamos que esta edición tenga la misma acogida que la anterior.

Se trataron temas contables, haciendo un repaso al año y comprobando como nos encontramos con respecto al presupuesto que se realizó para el 2018 y analizando las desviaciones producidas, aunque hasta el momento no son muchas. Como viene siendo habitual se trató el tema de las cuotas y la necesidad de reajustar las mismas.

Dentro del marco internacional estuvimos hablando sobre la comisiones técnicas y de medio ambiente de la PRE que se han llegado a cabo y el impacto de lo allí tratado para nuestro país.

El Presidente quiso dar la bienvenida a Anfre a Manuel  García de Navarro Sic, persona que sustituye a Juan Valledor como representante de la empresa en ANFRE.

Al finalizar la reunión pudimos relajarnos y charlar en la comida ofrecida por ANFRE

Una vez más queremos dar las gracias a todos los asociados por seguir creyendo en ANFRE.

Os esperamos en Febrero.