Huntsman to shut Europe plant; Kerala High Court beach sand mining

By Kasia Patel
Published: Wednesday, 31 December 2014

Hunstman is slashing 900 jobs as part of $130m cost-cutting drive, with restructuring to be completed by mid-2016. Meanwhile, the Kerala High Court in India has dismissed the state government’s appeal against a decision allowing private companies to mine mineral beach sands in the state, which are rich in titanium, ilmenite and rutile.

Titanium dioxide (TiO2) producer Huntsman Corp. is to shut a European plant and cut its workforce by around 900 positions to improve the global competitiveness of its pigments and additives business.

The restructuring programme is estimated to save the company $130m annually, and is expected to be completed by mid-2016.

A company spokesperson confirmed to IM that around 75% of the reductions will come from the newly acquired pigment business, which it took over from Rockwood Holdings in October, including at one site in Finland, and two in Germany. 

"Our overall aim is to create a market leader, and we’re well on the way, but obviously there are some steps we need to take before we get there," the spokesperson told IM.

Huntsman is currently in discussions with workers’ representatives regarding the restructuring, and expects that the changes will start to take place in the new year.

"We are in discussions, and of course we will respect the laws of the respective countries," the spokesperson added.

Huntman’s CEO, Peter Huntsman, said that the $4bn Rockwood business acquisition means the company now has the broadest product offering of specialised pigments in the industry and that the restructuring will enable the company to compete more aggressively on a global scale.

"In terms of further restructuring, there is nothing else in the pipeline as far as I know, the business is in good shape," the company spokesperson told IM.

Capacity reductions

Huntsman is also evaluating TiO2 capacity reduction options in its pigments and additives business, which the spokesperson confirmed would most likely be decided in the new year.

During a conference webcast in December, CFO Kimo Esplin said that Huntsman "probably doesn’t need" all seven of its European TiO2 plants

Huntsman said he believed TiO2 prices were "heading to the bottom" as 2014 came to a close, adding that it was difficult to call the floor in the market, but that many buyers of TiO2 were hesitant to make purchases.

"On ilmenite, prices have been low for ores and I believe there will continue to be downward pressure on those ores," he added.

Kerala High Court rules for beach sand mining by private companies

The Kerala High Court in India has dismissed the state government’s appeal against a decision allowing private companies to mine mineral beach sands in the state, which are rich in titanium, ilmenite and rutile.

According to local media reports, Industry Minister, PK Kunhalikutty, will release a roadmap on how to proceed with the issue.

"There is no need for any knee-jerk reaction and all things will be dealt with our government after going through everything," he was reported as saying on India TV News.

A division bench of the Kerala High Court asked the state government to consider 29 pending applications from private and joint sector companies seeking approval to mine mineral sands from beaches in Kerala in December.

The state government had originally decided to bar mineral sand beach mining by private companies, but this decision was dismissed by Kerala High Court in February 2013. The state government proceeded to appeal the decision, though the appeal has now once again been dismissed.

Currently, the only companies allowed to mine beach sands in the area are state-owned Kerala Minerals and Metals Ltd and central government-owned Indian Rare Earths Ltd.

The decision to allow private companies to mine beach sands in the area has also been met with hostility from the opposition Communist Party of India (Marxist), which has urged the government to file another appeal, this time in the Supreme Court.

In a statement, the party criticised the government in its delay over filing an appeal. Opposition leader VS Achuthanandan added that public sector companies should be given mining opportunities in the region over private companies.

Chief Minister Oomen Chandy, however, told India TV News that there had not been a delay in appealing.

"Now the next step in this issue would be taken through discussions with appropriate people. Each and every aspect would be looked into, and then we will take the decision," he said.

Beach sand mining bans

Neighbouring Indian state, Tamil Nadu, has also faced problems in terms of regulating its beach sand mining industry.

In September 2013, a ban was implemented in the state following a report on illegal mining of beach minerals in the Tuticorin district and mineral sand miners subsequently took to the streets to protest the ban.

The ban led to the closure of 71 sand mines in the area and pushed up domestic sand prices, which in turn affected the availability of mineral sands such as ilmenite, rutile and garnet, as well as the construction and aggregates industries.

Mineral Sands News Review

Tasnee signs $428m agreement to increase stake in Cristal 

Saudi Arabia’s National Industrialization Co. (Tasnee) has signed a $428m agreement to increase its stake in TiO2 producer Cristal Global by 13%.

Cristal confirmed to IM that Gulf Investment Corp. (GIC) agreed to sell part of its shareholding in Cristal to Tasnee, taking Tasnee’s stake in the company from 66% to 79%. GIC will still hold 20%, while the remaining 1% will continue to be owned by a private investor.

A bid for the shares was initially made in September.

Cristal previously indicated it was moving towards vertical integration though its joint venture (JV) agreement to build a 15,600 tpa titanium sponge production facility in Yanbu Industrial City, Saudi Arabia. The company is also building a 500,000 tpa titanium slag operation in the country.

However, Cristal confirmed to IM that it does not believe the change in shareholding will affect its operations or strategy.

Kenmare rebuffs Mozambique mine criticisms 

Irish mineral sands miner Kenmare Resources Plc has rejected criticisms by the Center for Public Integrity (CPI), which said the company has failed to meet pledges to people near to its Moma mine in Mozambique.

According to the report, which was published at the end of November, promised infrastructure upgrades around the site had not been carried out, while schools built by Kenmare remained unconnected to the power grid.

The company was also accused of providing inadequate housing for local people displaced by its Moma mineral sands project.

"Kenmare wholly rejects the suggestions made by CIP regarding our commitment to the Mozambique economy," a company spokesperson told IM. "The CIP statement is filled with inaccuracy and misrepresents our business and our relationship with the community in which we operate."

The company added that it has constructed a total of seven primary schools and agreed to support a further maintenance programme for their upkeep. However, the schools are run and maintained by the Ministry of Education, and at the time of construction electricity was not available in the villages in question, Kenmare told IM.

"The final connection to the schools must be carried out by EDM (Electricidade de Mozambique)," the spokesperson told IM.

The company also refutes claims that it has not kept to its infrastructure obligations, saying that it has made electricity supply available for over 70,000 people in the region.

MZI signs 25,000 tpa leucoxene sales agreement with DuPont

ASX-listed MZI Resources Ltd has signed a sales agreement with DuPont Titanium Technologies for 25,000 tpa leucoxene from its Keysbrook mineral sands project in Western Australia.

The agreement, which is for an initial term of five years with an option to extend the term, means that around 85% of MZI’s planned annual production volume has now been accounted for, which helps to de-risk the project, MZI said.

"Having DuPont, the world’s largest TiO2 pigment producer, enter into a sales agreement for a large portion of Keysbrook’s annual L88 production, combined with the existing sales agreement for all L70 production, is a clear indication of the strategic value of the Keysbrook project and its products," MZI’s CEO, Trevor Matthews, said.

MZI plans to continue discussions with other potential customers for sales agreements for Keysbrook during the construction of the project.

MZI also announced that following the completion of all funding conditions, its board of directors has resolved to proceed with the development of the Keysbrook project, which is located 70km south of Perth.

AkzoNobel to supply vehicle refinishes to Daimler 

AkzoNobel Performance Coatings has signed an agreement with Daimler to become an approved supplier of vehicle refinishes to the automotive company and approved bodyshops globally.

Under the terms of the contract, AkzoNobel will supply and support Daimler’s dealership network with its Sikkens brand of products.

"We are delighted to have been approved as a global supplier for one of the world’s leading automotive companies," Jorg Anders, a key account manager in AkzoNobel’s Vehicle Refinishes business, said.

"The deal reflects the industry’s trust in our products and services, our strength in product innovation and colour matching and in particular the range of services and support that we over our customers." 

Approval was granted after extensive testing and analysis revealed Sikkens products to comply with the highest automotive industry standards.

Savannah identifies higher grades at Mozambique project

UK-listed Savannah Resources Plc has confirmed zones of higher grade heavy mineral sands (HMS) at its Jangamo heavy mineral sands project in Mozambique.

A 1,920 metre scout and resource drilling programme was completed at the 180km2 resource in September 2014 and revealed results of 24 metres at 5.21% HMS in one location and 33 metres at 5.18% HMS at another.

The company now plans to work on calculating a JORC resource for the mineralisation which is expected to be completed by the 

end of 2014, Savannah’s CEO, David Archer, said.

Savannah aims to focus on the 15km strandline to the west of the project area, which intersected encouraging zones of mineralisation. A metallurgical test work programme is also underway on the HMS, with samples en-route to Perth.

According to Archer, Mozambique, which currently only has one major mineral sands producer - Kenmare - represents a huge opportunity for the sector as the industry has to date been relatively underexposed.

TiZir makes first ilmenite shipment

Senegal-based JV mineral sands miner TiZir made its first shipment from the Grande Cote mineral sands mine of around 27,000 tonnes ilmenite to the TTI ilmenite upgrading facility in Norway in December.

TiZir, which is equally owned by Eramet and Australian company Mineral Deposits Ltd (MDL), owns both Grande Cote and TTI.

Once ramped-up, the mine should reach output levels of 4.5m tpm ore.

Grande Cote is capable of providing 7% of the world’s TiO2 and zircon feedstock requirement at regular production levels of around 85,000 tpa zircon and 575,000 tpa ilmenite, including smaller masses of rutile and leucoxene, over an operational period of 20 years.

"Environmental regulation is limiting operation rates and this will continue to kick some producers out of the industry," Wang said.