Ukraines sole miner of titanium dioxide (TiO2)
feedstock has blamed the personal hostility of
former Prime Minister Yulia Timoshenko for the uncertainty over
mining licenses it is now facing.
The Ostchem Group, owner of miner
Crimea Titan, claims that Timoshenkos reasons for
rescinding the right to mine the Irshansky and Volnogorsky
deposits came from personal issues with shareholders of the
Last year, Timoshenko effectively
shut the ilmenite, rutile, and zircon operations overnight by
revoking the mining licence which sparked panic buying from
African and Australian sources.
Oleksiy Fedorov of Ostchem told
IM: Discussions concerning legitimacy of
the rentÉ had neither economical nor legal basis, but
had political character thatÊwas caused by the personal
hostility of the former Prime Minister Yulia Timoshenko to
shareholders of the Ostchem Group.
Mining restarted once it was
clarified by an independent body that its licence was valid but
while Ostchem still battles to clarify its Ukrainian feedstock
future, its mines are still in operation.
repeatedly broke legislative norms in the conflict. However
judicial bodies have confirmed the legitimacy of rent and
competency of Ostchems position, said Fedorov.
Vienna-based Ostchem owns 50% of
Crimea Titan. The problem facing the company is that that the
government owns 50% plus one share more, a golden share which
gives the necessary sway in a vote on its future.
There is a belief in Ukraine and in
the wider TiO2 feedstock industry that the mines
will fall into full state control.
The new [government] has
simply endorsed the cancellation of licences and has gone one
step further by declaring its intention to fully renationalise
the two mines, said one industry expert.
Ostchem denies any problems between
itself, the state and its mining activities and said the two
parties are in useful and effective dialogue to
define the new terms of the lease.
The company expects a
definitive agreement within two months but stressed
its priority to keep the new government out of operational
At the moment there are no
problems between Ostchem and state structures concerning the
Irshansky and Volnogorsky mines, said Fedorov.
The main [priority] for
Ostchem is that present dialogue with Nikolay Azarovs
government does not have any influence onÊworking
capacity and development of the mines, he added.
The search for foreign
The two titanium mining regions are
in the Zhitomir oblast hosting the Irshansk deposits of
ilmenite, rutile and zircon and in Dnepropetrovsk oblast where
Volnogorsk ilmenite deposits, is mined.
Ostchem has had control of these
since 2004 but revealed to IM it is now
searching for partners with more advanced technology to tap
into new areas of mineralisation in the Irshansky deposit, in
particular the handling of siderite impurities.
[The technology] would allow
us to begin development of new major ore deposits in the
Irshansky mine, said the company, Éwe are
now searching for foreign partners because within Ukraine the
technologies do not exist.
A third region is being developed
in the centre of the country near Kirovograd where four areas
are being explored.
With the mines operating at full
capacity, present domestic mineral production has been hampered
by falling mineral grades and a harsh winter which froze water
supply lines so heavy mineral concentrate slurries could not be
The domestic supply restrictions
have hit Ukraines two
sulphate TiO2 pigment producers Krymsky Titan
and JSC Sumykhimprom which are major consumers of rutile
and ilmenite concentrates mined from the countrys north
and centre (see map).
Such is the quality and abundance
of Ukraines titanium mineral desposits, new projects are
looking for investment as outlined by Igor Stelmakh of
Ukraines Exim Consulting in his presentation in London
Two sand projects, Volchanske and
Birzoliviske, require $15m. and $50m. respectively, and the
Nosachivoke hard rock deposit needs $600m. to be fully
While all of the permits to start
mining have been granted, issues with the investment climate
need to be addressed.
Output falls, prices rise
Ukraine exports over half of its
titanium concentrate output which has averaged 500,000 tpa over
the last five years Ð this has waned in recent times.
Reported figures show ilmenite and
rutile concentrate production dropping from 288,440 tonnes in
2008 to 219,070 tonnes in 2009. While these would coincide with
and reflect the countrys mining troubles, some have
questioned the accuracy of the figures.
I am uneasy about these
figures, they do look rather low, said one industry
Concentrate production in January
2010 compared with the same month in 2009 depicted a 27% drop
in output equating to 6,020 tonnes.
Falling production in the country
has resulted in increased enquiries for feedstock in the rest
of the world.
During the past three months
we have been inundated with new enquiries from Ukraine, Russia
and Eastern Europe for welding grade rutile. We have certainly
been receiving interesting offers and matters appear to be
intensifying, one rutile supplier told
Australias Iluka Resources
Plc also reported increased activity from European buyers.
Feedstock spot prices from Eastern
Europe have started to reflect the squeeze in supply.
Ilmenite FOB spot prices from the
area are between $85-90/tonne while rutile on an FOB basis now
has an asking price in excess of $600/tonne.
With uncertainty in Ukraine and in
the wider global feedstock industry, prices are set to either
hold at this level or continue to rise. For buyers of titanium
minerals, a question mark not only hangs over the country as a
consistent source, but also over a steady long-term supply on a
Ukraine TiO2 by numbers
Average yearly output of ilmenite and rutile concentrates
Capacity of the countrys TiO2
industry through two sulphate producers, Krymsky Titan and JSC
Share of the worlds titanium minerals reserves
estimated to be over 100m. tonnes
Amount of exported concentrate received last year by
Czech Republic, the biggest buyer from Ukraine, equating to
Number of explored ilmenite and rutile deposits in the
Spot prices for a tonne of pigment grade ilmenite from east
Spot prices for a tonne of pigment grade rutile from east
Ukraines titanium minerals and zircon
Source: Igor Stelmakh, Exim Consulting