The estimated 430,000 tpa global andalusite market is produced
by just a handful of companies in the world (see
table). South Africa is the worlds largest producer
of the aluminosilicate mineral, which is used as a feedstock
for refractory and foundry products, with an estimated output
of 295,000 tonnes in 2010.
The other main producer is France
with a 80,000 tpa capacity, followed by China with 40,000 tpa.
Peru is the markets newcomer - entering the industry
about two years ago - with Spain expected to follow the trend,
coming on stream in 2012.
Damrec SA - subsidiary of
Frances mining conglomerate Imerys SA - remains the
worlds largest producer, having operations in South
Africa, France, and China, in addition to an unexploited
deposit in Peru.
|Major andalusite producers
Despite a slowdown during the
financial crisis, the refractory market is picking up slowly
mainly thanks to China and India which have performed
relatively well despite the recession. This comes as good news
for the andalusite industry, as during the last two years the
refractory market has seen a shortage in the material. As a
result, the main producers in South Africa, Peru and China have
decided to expand their operations in order to meet the
increasing demand as a potential alternative to Chinese
The recent slowdown in the
world economy appears to be over, Carlos De Ferrari, part
of the senior management of Perus Andalucita SA, told
IM, adding that a positive factor is the
growing world industrial economies in China, Russia and
Isti de Ujfalussy, president of
Spains Picobello Andalucita SA, confirmed the trend:
The market seems to be very stable. It is now back to
Although the market is getting back
to brighter days, it remains sluggish and slow; this was
especially true in Q1 2011. In the second quarter we are
seeing more movement than in the first one, but it is still not
rolling properly, commented Andreas Pabst, sales and
marketing director of South Africas Andalusite Resources
On one hand, the weakening dollar
and euro have had a negative impact on the market, in addition
to the rise in oil prices. On the other hand, there seems to be
a general situation of supply saturation in some of the
alumina-based refractory raw materials: Andalusite seems
to be in this group, Pabst said, underlying that
the challenge is currently in managing the short-term
outlook of the market (very little predictability) as well as
keeping inflation (operating and logistics costs) under
South Africas andalusite production is expected to
increase by about 32%, from the present 295,000 tpa to an
estimated 390,000 tpa, within the next three years.
Two companies own andalusite mines
in South Africa, which reports a reserve base of about 51m.
tonnes of aluminosilicate (in this case, andalusite and
sillimanite) ore. Imerys subsidiary Damrec produces more than
70% of the andalusite in the country.
The other major South African
producer, Andalusite Resources, is a relative newcomer to the
andalusite industry. It is the only alternative supplier of the
South African material outside Damrecs subsidiaries Rhino
Minerals Pty Ltd and Samrec Pty.
Andalusite Resources started
production in 2003 at its Maroeloesfontein mine, located in the
Limpopo province about 220km north-west of Johannesburg. The
company increased production by 40% in the middle of last year
from 50,000 tpa (57% alumina Al2O3) to a
present production of 70,000 tpa. The company also made some
improvements on quality at the beginning of 2011, by reducing
impurities in the final product.
As Pabst underlined to
IM, about 70% goes into the steel industry,
the remainder being fairly evenly distributed between ceramics,
glass, and waste incineration. About 2% goes into aluminium.
The company supplies Europe, South Africa, China and India in
addition to Russia, Japan, South Korea, Taiwan and other
countries in Asia and the Middle East.
The present mine life is 60 years
at a production rate of 70,000 tpa but Andalusite Resources
expects to increase this to a minimum of 80 years mine
life by the end of 2011, once the companys exploration
licence has been converted into a mining right for its
We are still on track to
expand production to 80-100,000 tpa by end of 2012, provided
the market grows along and accommodates that growth,
Trading group Cofermin is
responsible for the marketing of about 65% of Andalusite
Resources production. The company is the agent for almost
all export markets including Europe, China and India.
Andalusite Resources operates close
to the Damrec-owned Thabazimbi andalusite facility. Damrec, a
direct competitor of the company, has also planned to increase
its output by 29% to reach a targeted 290,000 tpa within the
next three years.
Damrec has four andalusite mines in
South Africa, producing about 225,000 tpa: Annesley, Havercroft
and Thabazimbi in the Limpopo region Ð owned by
Damrecs subsidiary Rhino - which is located about
30km from the Maroeloesfontein mine.
The fourth mine, Krugerpost, owned
by Damrecs other subsidiary Samrec, is located in the
Mpumalanga region, near Lydenburgh.
Damrec has been working on three
levels to increase its production by 55,000 tpa within the next
three years: de-bottlenecking at Thambazimbi (20,000 tpa added)
and Krugerpost (10,000 tpa added) and an extension at Segorong,
with Rhino having finally obtained the approval from the South
African government for the exploitation of its Segorong
Peru entered the andalusite market almost two years ago when
Andalucita SA started production at its deposit located near
Paita in the north-west of the country in August 2009. Imerys
owns 5% of the same deposit but has not yet put it into
Andalucita, which produces 15,000
tpa of andalusite at typically 59% Al2O3
and 0.8 % Fe2O3, is also on course to
increase production to 55,000 tpa by mid-2012.
There is increasing demand as
the quality and reliability of our product becomes better known
in the market, Andalucitas president executive told
IM, pointing out that the deposit was an
alternative when purchasing first quality andalusite.
The primary challenge is to
demonstrate to the worlds industrial base that the use of
Paita andalusite can contribute positively to their operations.
The opportunities involve the current growing world demand for
top quality andalusite, De Ferrari explained.
Spain has been looking at entering the andalusite market for a
few years but the project was slowed down by permits
acquisition and founding. However, Picobello Andalucita
SLs project seems to be back on track, expecting to get
its Picobello deposit, located 15km from El Ferrol port,
north-west Galicia, into production next year.
The Picobello andalusite deposit,
looked at for some years by a range of players, was given a
boost in 2007 when Picobello Andalucita secured initial
financing for the project.
The project provides for a 65,000
tpa plant and mine life of 15 years, extracting ore to a depth
of 20-40 metres. However, since 2007 little had been heard of
the projects progress, and there was speculation over the
absence of further funding.
If we can complete investment
within the next 90 days [July 2011], we could be in production
in mid-2012, Isti de Ujfalussy, president of Picobello
Andalucita, revealed to IM.
The Spanish company is targeting a
capacity of 65,000 tpa: 50,000 tpa refractory grade and 15,000
tpa for two other applications which remain confidential,
including one in the metallurgy sector.
Although the mine has a life of 15
years on 20 metres depth, Ujfalussy underlined there is
potential to extend to 60 metres: so the reality is that it
could be 200 years, he said, adding there would be no
drilling in the first 15 years as it is only indicated at about
Picobello, which mainly targets
European end markets, declared that the company was also in
talks with Chinese investors interested in investing and
getting product. Japan and South Korea are knocking at
our door too for product, Ujfalussy added.
Prices are depressed, stagnant, Pabst from
Andalusite Resources described to IM, adding
that they will have to increase, as inflationary factors
simply cannot allow andalusite producers to keep on absorbing
Andalusite is not a high
margin raw material, so South African andalusite producers in
particular will have to increase prices sooner rather than
later as the ability to absorb cost increases for too long a
period is limited, he explained.
As reported by IM,
in December last year South African andalusite
prices were lifting for Q1 2011, with 57-58%
Al2O3 material, FCA mine moving up to
238-270/tonne for bulk, 2,000 tonne lots, from
225-255/tonne. The price of 55-59%
Al2O3 andalusite, FOB European port was
also moving upwards, to 355-410/tonne from
335-385/tonne. The increase is expected to continue
De Ferrari from Andalucita forecast
a tendency for the price to go up as a direct
reflection of increasing mining and manufacturing costs and as
the US dollar decreases in value. Global andalusite
prices are in a state of flux with increasing demand because of
the growing world economy and new expanded facilities, he
Isti de Ujfalussy, president of
Picobello Andalucita, confirmed the trend. Demand is
solid. End users cannot resist prices, he said.
One of the main factors for
andalusite prices will of course depend on what happens with
bauxite and its exports outside of China. Andalusite is seen as
a cheaper alternative in terms of costs to refractory bauxite
which ranges between $410-510/tonne depending on the grade.
With andalusite presently ranging between $230-400/tonne, the
substitution between the two raw materials remains tempting for
As Tim Geldmacher, managing partner
at Cofermin, commented to IM: If you
look at the insecure supply situation of bauxite from China and
the tremendous price increases this important mineral has gone
through over the last few years, it becomes clear that
andalusite - which is available from non-Chinese sources at
stable and competitive prices throughout the last few
years - is one of the most likely substitutes for bauxite
in those areas where it is technically possible.
The main market for andalusite remains the refractories
industry. Bauxite supply being mainly controlled by China, the
most promising options seem to come from the use of andalusite
as an alternative to bauxite in certain refractory
European refractory producers
cannot count anymore on prices or stability from China. They do
not feel secure with Chinese bauxite. So there is a gradual
movement to andalusite, Ujfalussy from Picobello
Andalucita commented to IM.
As a result, it has naturally
become an attractive beacon to andalusite producers and
De Ferrari believes that, as we see
more and more andalusite replacing bauxite, the growing
world market can readily absorb new producers of first quality
refractory raw materials.
The new trends are to branch
out into replacing other raw materials such as bauxite in
certain applications, Pabst explained to
IM, adding that andalusite could potentially
become a long-term alternative to the usual refractory raw
materials in certain applications.
De Ferrari from Andalucita
confirmed that using andalusite as the replacement for other
high alumina refractory raw materials such as bauxite had a
good potential, however he warned that direct usage comparisons
must be carefully handled between the two materials as it is
not possible to compare the in-service life of bauxite with
Despite any difference in
chemistry, as with Al2O3, in some
services andalusite may impart some positive longer-life
characteristics. The numbers are only indicators. Andalusite
has performance attributes not found in bauxite. Actual
performance in service is the only real test, warned De
is not to replace bauxite but to economically complement,
In addition, andalusite players are
also working on developing new applications for their raw
material - such as in technical ceramics or energy -
but results are still kept confidential. We need to
develop technology and to formulate different products,
In South Africa, Pabst revealed to
IM that Andalusite Resources is running a
study in conjunction with Mine Feuerfest from Germany to this
effect. In Peru, Ferrari confirmed that new applications were
presently under research.
Seeing good opportunities for
andalusite, Geldmacher from Cofermin confirmed that the
company was working actively to explore new
However despite the price and
availability advantages, the industry needs time to make the
necessary tests and decisions to substitute one mineral with
another, he pointed out.
In terms of regions, Asia and South
America remain the most promising end markets. South
America, and particularly Brazil, is very good place for
andalusite, explained Ujfalussy although it has
nothing to do with [the companys] plans.
Despite a rather sluggish market at present, andalusite players
have hopes for a bright future for the industry. The
market can only get better, Pabst declared to
IM. The continuing appetite from China
for andalusite and other raw materials that andalusite can
potentially replace will drive demand and grow the market; at
what pace is not clear right now, he explained.
Among the main factors expected to
impact the andalusite market, opportunities lie in Chinas
further restrictions of bauxite exports.
We see a stable demand with
growth potential, De Ferrari confirmed to
IM as the world refractory industry is
unhappy with the unfair practices of the Chinese
with domestic refractories manufacturers getting better prices
for bauxite than the industry outside of the country.
Pressure to produce longer lasting,
lower cost refractories also stimulates the industry. Finally,
demand for higher quality refractories from emerging economies
such as Asia is expected to keep boosting the industry, with a
growing potential coming from India, Indonesia, Vietnam, the
Philippines, and Turkey, in addition to Brazil.
Russia is also seen as a promising
region for andalusite from end users. It is becoming a
bit of a hub, believes Ujfalussy.
Andalusite is poised to be a significant
contributor, De Ferrari forecast.
| Andalusite Resources, which started production
in 2003 at its Maroeloesfontein mine, in the Limpopo
province, increased production by 40% in the middle of
last year to 70,000 tpa