The titanium dioxide
(TiO2) industry is at the dawn of a new era,
delegates at the TiO2 World Summit 2014 in Montreal,
Canada, heard in October.
Reg Adams, managing director of
UK-based minerals and pigments intelligence provider, Artikol,
explained that one factor likely to have an effect on the
industry in the near future is the wholesale change underway at
many of the worlds largest TiO2 plants.
He highlighted the merger between
Tronox and Exarro, which was completed in 2012, DuPonts
decision to spin off its TiO2 business in 2013,
changes in ownership of shares following the death of
Kronoss former CEO, Harold Simmons, last December and
privatisation of plants in Eastern Europe.
Despite this, Adams told delegates
that following the finalisation of the acquisition Rockwood
Holdings Inc.s pigment division by Huntsman Corp.,
further major changes in TiO2 supply are unlikely in
the near future.
Other potential threats to
supply are what I call existential factors, Adams said.
These include a larger focus on health and environmental
effects of production as well as a bigger concern by companies
about their carbon footprint.
In terms of pricing, Adams outlined
that Artikol agrees with forecasts published by
IM indicating that TiO2 prices are
unlikely to trend upwards before the end of 2015, after which
they may see a slight increase.
More positively, Artikol predicts
that there are still opportunities for the TiO2
industry, with growth in TiO2 pigment demand
expected to be around 4% per year to 2020.
Even though Chinese demand
has slowed, as has been very much discussed, growth here is
still expected at around 6.55% a year, Adams said, adding
that a slowdown was inevitable owing to the very low demand
base which then expanded very rapidly in a short space of
Changes in China
Chinas increasing role in the
TiO2 industry is likely to have a large impact on
developments in the market, as the country now accounts for a
third of global production. The landscape of the
TiO2 industry in China is rapidly changing, owing to
industry consolidation, expanding production and the adoption
of new processing routes, according to analysis by one leading
paints and coatings producer.
Speaking at the conference,
Laurence Wang, business manager at Tinox Chemical LLC,
confirmed that industry consolidation in China is ongoing, and
that another two or three producers in the country are likely
to become bankrupt before the end of 2014. This means that
Chinas top six TiO2 pigment producers now
account for over 50% of the market, he said.
While ownership of existing
capacity continues to change hands, delegates were also told
that expansions in Chinese production of both feedstocks and
pigments are also occurring.
Because of titanium feedstock
shortages in China, there were very quick expansions. Prices of
TiO2 feedstocks have also dived and so this limits
feedstock imports, not because of quality reasons, but due to
higher prices outside of China, Wang said.
The rapid expansion of
TiO2 feedstock output in China over the last three
years has meant that around 64% of local TiO2
finished product is now supplied by local titanium ore sources,
compared with around 35-50% previously.
However, this has led to a steep
decline in Chinas ilmenite prices - steeper even than
that outside of China. Rutile prices, on the other hand, face a
more certain future. In contrast to predictions for rutile
prices outside China, these are expected to begin to see
improvements by the second quarter of 2015, Wang said.
Additionally, these developments
have meant that while domestic TiO2 pigment demand
in China has remained flat, exports have soared to record highs
as consumers view China as a competitive source of good quality
In order to compete with material
from outside the country, companies like Xinli, Billions,
Luohe, Jinzhou, Wanji and Pangang are investing into less
wasteful and more environmentally friendly pigment production
Companies are investing into
the chloride process, but it will take a long time for more
high quality chloride feedstock processes to come online,
Currently, there are only three
plants in China using the chloride route process, according to
Wang, although pressure to shift from the sulphate processing
route is also being felt owing to more stringent environmental
Plants are sometimes forced
to decrease capacity to as low as 30%, because they cannot have
pollution at these high rates and environment is a top priority
This has, however, led to the
closure of smaller, more polluting plants, accounting for
between 8,000-10,000 tpa TiO2 pigment, and,
according to Wang, these are unlikely to come back online.
Further, with natural gas becoming
more expensive in China, energy, sulphuric acid and ilmenite on
average now account for over three quarters of the total cost
of pigment production, meaning that producers cannot afford to
operate at such low rates.
Environmental regulation is
limiting operation rates and this will continue to kick some
producers out of the industry, Wang said.
Only the innovative will
According to Bill Eibon, director
of global colour technology platform at global paint maker PPG
Industries - who also spoke at the conference - the global
pigment market is expected to grow at compound annual growth
rate (CAGR) of 4.7%, while speciality pigments are expected to
grow at a CAGR of 5.4%.
Eibon said that innovation and
investment in new products and processes will take the pigment
industry forward, and that those who are investing in new
technologies will have the advantage over other market
Investment in process
innovation can create innovative products that disrupt the
status quo, he told delegates. Right now there is
more innovation in replacing TiO2 than there is
within the [TiO2] industry itself.
This doesnt do anything
for supply chain security, Eibon said, adding that
feedstock supply security is still a part of the puzzle that
needs to be dealt with.
The maturation of Asian suppliers
in the pigment industry is also a cause for concern for
If you think that these
companies cant compete then youre in for a rude
awakening, Eibon warned.
However, as industry participants
at the TiO2 World Summit emphasised that more
innovation is needed in pigments, Gerry Colamarino, senior
consultant at TiPMC Solutions LLC, argued that that, right now,
TiO2 is not synonymous with research and development
Although current price levels are
much higher than historic averages, the industry is in a
depressed state with earnings and margins at unhealthy levels,
Colamarino explained. This means that reinvestment economics
continue to be unfavourable.
Thats why we really
need R&D to expand these opportunities, Colamarino
said. In terms of industry breakthroughs I dont
want to say that innovation is dead, but the innovation
pipeline is relatively bare in comparison to where it used to
According to TiPMC, the goal then
for the industry is to focus on improving the production
process to cut costs.
Weve pushed the boat
out on grade development, so I dont think thats the
answer. This is a production intensive industry, so thats
where we need to focus R&D to bring those costs down -
Im not talking about just cost cutting, but innovation
along the supply chain to come up with something new,
The innovation pipeline is there, but its not
reflective of the opportunities, he added.
Mineral Sands News Review
Kenmare-Iluka negotiations continue
Kenmare Resources Plc. has
confirmed that its discussions with Australian miner Iluka
Resources Ltd continue to centre on valuation of the
Kenmares managing director, said that problems affecting
the companys mineral sands production in the third
quarter of this year were not a factor in the ongoing
The issue Kenmare is
facing is one of market valuation, rather than
production, Carvill told IM.
He added that output at the
companys Moma mine in Mozambique had not moved with
the same alacrity as in Q2, but that the decline in
production was nothing significant.
Kenmare reported a 24% year-on-year
(y-o-y) increase in total shipments of finished mineral sands
products to 183,200 tonnes in Q3 2014 from Moma, as US markets
continued to improve.
Total sales comprised 166,100
tonnes ilmenite, 13,800 tonnes zircon and 3,200 tonnes
Production of ilmenite, zircon and
rutile from Kenmares Moma mine increased y-o-y by 6%,
156% and 167% respectively for the quarter, although heavy
mineral concentrate (HMC) production saw a decrease of 9%.
Market still lagging, says
Rio Tintos mineral
sand output slipped 11% in the first nine months of this year
when compared to the same period in 2013, the Anglo-Australian
miner confirmed in its Q3 production results, released in
The slip in production
across the RTIT business reflects soft market demand, the
company added, as production at its different resources
continues to be optimised to align with market
production slipped 2% to match shipments.
Rio Tinto produced 365,000
tonnes TiO2 in Q3 2014 and 1.12m tonnes in the first
nine months of this year.
For the full year the
company expects to produce 1.5m tonnes of TiO2
Ebola impacts Sierra
Rutile, ilmenite and zircon mineral miner Sierra Rutile
released an operational update for Q3 2014, which indicated
that it had increased its ilmenite production over the quarter,
but that rutile output had remained flat.
Rutile production, at 27,078
tonnes, was 3% lower than during the previous quarter, while
ilmenite production, at 9,986 tonnes, was 19% up on Q2 2014.
Zircon concentrate production was at 444 tonnes, down from 488
tonnes the previous quarter.
For the FY 2014 the company has
advised that it expects to produce 120,000 tonnes rutile at an
all-in cash cost of $645/tonne.
The decrease in the FY production
was attributed by CEO John Sisay to the fact that the plant had
to disrupt production for three days due to a restriction on
production imposed by the Sierra Leone government because of
the Ebola outbreak. This caused a production loss of 1,500
Group DF TiO2
Group DF has confirmed to IM that its titanium
dioxide (TiO2) business operations in Volnogorsk,
Ukraine, are still suspended, following a seizure of control at
the companys facilities at the end of September.
On 22 September 2014, the facility
was taken over by a group of armed men accompanied by officials
of the Dnipropetrovsk Regional State Administration and the
Ministry of Interior of the Dnipropetrovsk region.
Failing to show any permits,
a group of unidentified people used physical force to break
into the companys territory in an unauthorised, illegal
and rude way under the pretext of transferring property, which
is on the balance sheet of Crimea TITAN JSC, to the earlier
created United Mining and Chemical Company, Group DF
As a result, the companys
activities at the facility have been completely disrupted as
Group DFs management was forcefully suspended from
Group DFs TiO2 business falls under Crimea
TITAN, which is the largest TiO2 producer in Eastern
Europe, supplying around 2% of global consumption.