In 1967, the world supply of ilmenite was estimated to be a
little more than 2.7 million tonnes, while rutile supply was
around 300,000 tonnes. Fifty years later, ilmenite supply is
estimated to have reached almost 7 million tonnes, with rutile
approaching the 1 million tonne mark.
Ilmenite (FeTiO3) ), leucoxene (an alteration product of
ilmenite), and rutile (TiO2) are important titanium minerals
commonly extracted from heavy mineral sand deposits, but are
also derived from hard rock deposits. Titanium dioxide products
of ilmenite, rutile, leucoxene, as well as upgraded products of
synthetic rutile and titanium slag, are used principally as
feedstocks for the production of white pigment, but are also
used as a metal, as a welding electrode fluxing agent, and
So how has titanium feedstock demand and supply changed in
the past 50 years, and how did they change in 2017?
Fifty years ago, ilmenite prices were A$10 per tonne fob
Bunbury (Western Australia), or around A$122 ($95) per tonne
when adjusted for inflation, while rutile prices were around
$96 per tonne fob Australia in 1967, or A$1,173 ($919) per
tonne, after adjusting for inflation.
In 2017, 54% TiO2 ilmenite cif China went from $140-160
per tonne to highs of $200-280 per tonne before falling back
to current levels of $190-225 per tonne. The price of natural
rutile, min. 95% TiO2 bulk cif China, has increased from
$650-700 per tonne to its current high of $850-950 per
In 1967, Australia was by far the world’s
largest producer of rutile, with the bulk of material heading
for the United States. Australia was also significant in
terms of ilmenite, and the combined production with the US
accounted for around 70% of global production (excluding
Communist countries). Ilmenite concentrates from Australia
were destined primarily for the UK, France, Japan and the US,
as well as domestic pigment producers.
In 50 years, the production landscape has dramatically
changed, with ilmenite being primarily produced in China,
Kenya, Mozambique, Vietnam, India, Ukraine, Australia,
Senegal, Sierra Leone and South Africa.
Australia still dominates rutile production, and its
destinations for export have not changed much - with the
exception of China, whose import volumes rose to nearly
75,000 tonnes in 2017. Rutile in China is used for chloride
TiO2 pigment and titanium sponge (a raw material for titanium
metal) as well as in welding rods and flux cored wires.
The issues and opportunities facing the industry in the
1960s are not so different from those of today. A potential
shortage of rutile had become evident by the late 1950s and
early 1960s because of a strong upsurge in the demand for
titanium dioxide pigments.
|Australia was the largest global
producer in 1967, exporting
predominantly to the US.
These pigments were traditionally produced via the
sulphate route. However, by 1967, the emphasis on chloride
process production was becoming more marked, and pigment
producers in both the US and Europe were actively seeking
contracts for the long-term supply of increased tonnages of
The move to the chloride process was driven by
waste-disposal issues and anti-pollution legislation in the
Today, the demand for rutile is rising on increasing
demand from Chinese TiO2 manufacturers, which are already
making moves away from sulphate processing toward the
Chinese producers Henan Billions, Luohe Xingmao and Yunnan
Xinli produce about 100,000 tonnes per year of TiO2 via the
chloride route, but have completed chloride TiO2 plants with
combined production capacity of 220,000 tpy, meaning that
there is potential for more than 110,000 tonnes of added
rutile or slag demand in 2018 if that idle capacity were
Billions announced at the end of 2017 that it also planned
to add as much as 500,000 tpy of chloride capacity by 2030,
which would bring total Chinese chloride capacity to at least
800,000 tpy by that time.
Just as the US underwent a transformation 50 years ago,
China is now undergoing its own commercial revolution.
According to documents from Tronox Ltd, the vertically
integrated mining and inorganic chemical business, the
chloride process generates less waste, uses less energy, is
less labor-intensive than the sulphate process, and permits
the direct recycling of chlorine back into the production
As a result, the Chinese government is encouraging the
expansion of chloride-route plants as a key part of its 12th
Five Year Plan.
While this helps to explain the rising demand for rutile,
it is not the full picture, because Chinese titanium sponge
production and welding activities have increased this
Adding support to rutile prices is Iluka’s
declining natural rutile production forecast for 2018, as
well as the closure of Sibelco’s Stradbroke
Island operations by 2020, located 30 kilometres southeast of
Brisbane, Queensland, Australia.
Sibelco’s closure will subtract around 35,000
tpy of welding-grade rutile from the market. The titanium
feedstocks used in the chloride process include natural
rutile, but also slag, synthetic rutile and, in limited
cases, high titanium content ilmenite ores.
This fact, combined with increasing rutile prices, may
result in greater demand for synthetic rutile and titanium
A factor affecting both ilmenite and rutile on the supply
side is declining grades. In a November investor presentation
by Iluka Resources, managing director Tom
O’Leary repeated the view that the quality of
deposits currently being investigated for development "are
lower grade and lesser quality than those currently being
|Haul trucks move sand from the
Douglas mine in the Murray
Basin in Victoria.
This means that "there’s less zircon, less
rutile, less valuable chloride ilmenite".
Another issue affecting all titanium feedstock supply and
demand is the environmental concerns sweeping China. The
country’s government has introduced strict
emissions standards, and has begun strictly to enforce
It was reported in December that inspectors had demanded
the indefinite suspension of Sichuan mining and processing
operations after a drop in air-quality there. But it was also
reported that traders could not reach consensus over the
proportion of operations that have closed or that remain open
in the province.
One market participant confirmed that some plants and
mines there have already restarted and that the shutdowns are
"part of the continuing environmental monitoring".
One supplier suggested that the effect on ilmenite prices
may only be neutral, since the tendency is for mines and
processors to be forced to suspend operations simultaneously.
Evidence has so far supported this view, but we will need to
wait and see how this develops in 2018.
In Vietnam, ilmenite production quotas issued in 2014 put
limits on production, but have also sent some exports into
the illegal black market and made tracking their volumes
It was reported late in December that the Vietnamese
government had announced quotas are for some 1.422 million
tonnes of ilmenite and 159,000 tonnes of concentrate, with a
deadline of December 31, 2018.
Concerns that this would inflate supplies have been
rebuked by market participants, with one supplier predicting
that Vietnam will provide just 400,000 tonnes of ilmenite in
2018, which would be a small increase on the volume in
In India, around 40,000 tonnes per month was removed from
the market when operations in Tamil Nadu were shut down by
the local government. This situation is unclear and is likely
to continue into 2018.
Resources and reserves
|Goondicum Spiral banks.
When a major source for any material is shut down,
consumers need to find an alternative source. Luckily for
Chinese consumers of Indian ilmenite, South Africa and
Mozambique were ready to do business in 2017. In fact,
Chinese ilmenite imports actually increased last year
compared with 2016, helped by small amounts of cheap
low-quality material from Australia, as well as a flurry of
ilmenite arriving from Sibelco’s Stradbroke
operations as it prepared to shut down.
In order to keep up with demand, mineral sand producer
Iluka Resources has warned that capex of around $1-1.5
billion, or $500-750 million per year over 2018-19, will be
required to sustain current production levels.
O’Leary said in November that "that volume of
capital has not been spent. So the consequence of the lack of
investment will, over time, increase pressure on limited
supply and again drive pricing upward."
He also said that "there have been no discoveries of
significant higher-grade deposits in the past decade" and,
with very long project lead-times, this could create problems
for consumers of the future.
So what does the project pipeline look like for titanium
Goondicum – Melior Resources
producer, V.V. Mineral, is planning to expand
feedstock production in the country as prices continue
In October 2017, Melior secured $5.25 million in funding
from Pala Investments for the restart of its Goondicum
ilmenite mine. The company requires an additional $5 million
to be fully funded.
Located west of Bundaberg, Queensland, Australia, the mine
will use dry open-pit methods to produce an average of
181,000 tpy of ilmenite, with peak production of 228,000 tpy
expected in 2020.
The mine would also produce an average of 31,000 tpy of
apatite - a mineral used in the manufacture of fertiliser as
a source of phosphate - over its nine-year mine life. In
November 2017, Melior signed an offtake agreement with SOFT
Agriculture to supply it with 100% of its apatite production,
commenting that the agreement is testament to the quality of
Boonanarring – Image Resources
On November 8, 2017, Image Resources announced that it had
received final approval for the development of its
Boonanarring Project, located in the North Perth Basin, 80km
north of Perth in Western Australia.
The company will make a decision to mine in the first
quarter of 2018, with project construction and commissioning
to follow. The timeline for first production will be just six
months following the decision to mine.
Boonanarring contains 19.9 million tonnes of ore, which
contains 7.2% total heavy minerals (THM).
Of the THM, zircon constitutes 22.7%, rutile 2.4%,
leucoxene 1.8% and ilmenite 50.4%. The mine will be dry,
open-cut extraction with a production rate of 500 dry tonnes
per hour for a total 3.7 million tpy of ore.
Thunderbird – Sheffield Resources
|Alkane’s plans for
its Dubbo project, which is scheduled for production in
Located in the north-west corner of Western Australia,
Sheffield’s Thunderbird deposit (part of the
Dampier Project) is estimated to contain 680.5 million tonnes
of ore reserves, of which 76.8 million tonnes is heavy
mineral. Of that heavy mineral material, 7.7% is zircon, 2.4%
"HiTi Leucoxene", 2.3% leucoxene, and 27.4% ilmenite.
Sheffield intends to commence construction in the second
quarter of 2018, with initial earthworks and site access
arrangements under way.
Zircon products represent 62% of Sheffield’s
revenue stream, so it has focused strongly on securing
offtake agreements for this product. Offtake deals with CFM
Minerals, Ruby Ceramics, Sukaso Eracolors Ceramics, and
Hainan Wensheng High-Tech Materials Co now represent a
combined 100% of first-phase production for zircon
concentrates and around 75% of premium zircon production.
Fungoni – Strandline
Strandline Resources completed its definitive feasibility
study in October last year, with positive results. The
company revealed that a low development capital cost of $30
million would be required, a figure that includes mine
infrastructure, port facilities, working capital, land
access, pre-production mining, owners’ costs and
project contingencies of 10%.
Fungoni is located in Tanzania and has a
measured-indicated mineral resource estimate of 22 million
tonnes of ore at 2.8% total heavy minerals. The mineral
assemblage of the deposit is "exceptional", according to
Strandline, with heavy minerals constituting 42.3% ilmenite,
18.2% zircon, 4.4% rutile, 1.2% leucoxene and 1.5%
The mine is expected to be conventional dry mining, has an
initial six-year mine life at 2 million tpy, and is expected
to begin production early in 2019.
Mutamba – Savannah Resources & Rio
|Bluejay Mining demonstrates
stockpiling of high-grade ore
at its Finland project.
Savannah Resources and Rio Tinto are under agreement to
define a potential dry-mine in Mozambique. The project
combines Savannah’s Jangamo Project with Rio
Tinto’s adjacent Mutamba Project, which includes
the Jangamo, Dongane and Ravene and Chilubane Deposits.
The most recent news to come from the Mutamba Consortium
is that a pilot plant has been commissioned and officially
opened. The 20 tonnes per hour plant would be used to produce
concentrates as part of the continuing pre-feasibility study
A previously completed scoping study identified the
potential for a 30-year mine life on a resource of 451
million tonnes, containing 6% total heavy minerals. According
to that study, the Consortium would target first production
in 2020 with average production of 456,000 tpy of ilmenite
and 118,000 tpy of non-magnetic concentrate.
Dubbo – Alkane Resources
The Dubbo Project is located in central-western New South
Wales, Australia, and contains an 18.9 million tonne ore
reserve, contained within a 75.18 million tonne resource. The
reserve is made up of 1.85% ZrO2, as well as various economic
amounts of hafnium, niobium, yttrium and rare earth
The project is in advanced stages of development, having
had all state and federal approvals granted; the project is
construction-ready subject to financing. During the September
2017 quarter, the company was focused on securing offtake
agreements. It said in its March quarterly activities report
that the project is scheduled for production in 2019.
Dundas – Bluejay Mining
|Ilmenite and rutile pictured side
Formerly known as Pituffik, Dundas is the subject of a
feasibility study to be delivered in the March quarter of
this year. The heavy mineral sand deposit holds an inferred
resource of 23.6 million tonnes at 8.8% sulphatable ilmenite,
including a high-grade zone equal to 7.9 million tonnes at
14.2% ilmenite at Moriusaq, which is the focus of the
feasibility and production studies that are under way.
In September 2017, the company entered its first agreement
"allowing for the company’s bulk sample run of
mine (ROM) material to be refined into a high specification
ilmenite product" with an "experienced mineral sands
processor". This follows an earlier announcement in which it
was revealed the company had achieved a production rate of
less than 15 tonnes per hour.
The company said that it expects to produce "two high-spec
ilmenite products" that are "suitable for sulphate pigment
production and for both sulphate slag and chloride slag
Bluejay said in August that it would try to bring Dundas
into production in 2018.
Niafarang & Donald – Astron
|Holocene heavy mineral sand (seen
in dark areas)
concentrated by wave action.
Astron received a mining license for its Senegalese
Niafarang heavy mineral sands project in June 2017, saying at
the time it intended to start production in the first quarter
of 2018. But Reuters reported in September that a "dormant
Senegalese rebel movement has called for the abandonment of a
planned mineral sands project operated by Australia-listed
Astron, saying it amounts to "a declaration of war."
On October 31, Astron announced that all aspects of the
project are now being progressed to target commencement of
activities in first quarter of 2018. It is expected that the
mine will be a surface mine with little or no overburden,
meaning the mining method will be relatively straightforward,
with spiral separation.
Astron updated the market on its Donald project on the
same date, saying that "an updated feasibility study is
expected to be completed shortly" and that "work continues on
the capital aspects of the optimisation".
Glenaladale – Kalbar Resources
|Scrapers in a test pit in one of
Acquired in 2013 from Rio Tinto, the main deposit part of
the company’s Fingerboards Project is
self-styled as one of the biggest mineral sands deposits in
the world. The mineral resource of 2.7 billion tonnes of
heavy mineral is located 250km east of Melbourne in
From that massive number, the company hopes to extract 200
million tonnes of ore to produce around 5 million tonnes of
heavy mineral concentrate over a period of 20 years. The
company has highlighted in its most recent newsletter its
potential to produce 136,000 tpy of zircon. Kalbar has
proposed to start construction in 2019, with mining
At the end of 2016, the local government authorities
requested that Kalbar submit an Environmental Effects
Statement (EES) under the Environment Effects Act 1978 to
assess the potential environmental effects of the project.
The EES is due for completion around mid-2018.
Mount Peake – TNG Ltd
|Hydraulic mining operations at Base
Resources’ Kwale Project.
Located in Northern Territory, Australia, Mount Peake is a
vanadium-titanium iron project containing 41.1 million tonnes
of ore reserves, of which V2O5 makes up 0.42%, TiO2 7.99% and
The company recently announced that it had lodged its
Environmental Impact Statement (EIS). Once all environmental
approvals are received, the company will be in a position to
apply for a mining lease, subject to a mining agreement with
the traditional owners.
In its December 18 announcement, managing director Paul
Burton said that a decision on construction and mine
development will take place in 2018 subject to financing and
TNG has secured a Memorandum of Understanding offtake
agreement with Wogen Pacific for the sale and marketing of
its titanium dioxide products, a binding offtake agreement
for a minimum of 60% of its vanadium output with Korean
company Woojin, and a binding offtake agreement for its iron
products with Singaporean trader Gunvor.
A feasibility study update late in 2017 outlined the need for
pre-production capex of A$853 million ($668 million).
Orokolo Bay – Mayur Resources
|Base Resources wholly-owned
subsidiary, Base Titanium
Limited, operates the 100% owned Kwale Mineral
Operations in Kenya, which commenced production
Mayur is exploring for mineral sands in southern Papua-New
Guinea, along the coast of Orokolo Bay.
The company recently signed a Memorandum of Understanding
with the Gulf Provincial Government for an exclusive
development license, and an outline on cooperation in the
development of natural resources.
The project contains 86 million tonnes of industrial
construction sand, 173 million tonnes of magnetite at 9.2% Fe
(upgrades to 6.6 million tonnes of magnetite at 57% Fe) and
107,000 tonnes of zircon.
An internal PFS has estimated that the project could be in
production by 2019, producing 500,000 tpy of titanomagnetite
and 5,000 tpy of zircon concentrate over a mine life of 12
Engebo – Nordic Mining
Nordic Mining’s Engebo Rutile and Garnet
Project contains an inferred 138.4 million tonnes of ore,
comprising 3.86% TiO2 and 43.5% garnet. The dominant garnet
fraction has meant that the deposit has already signed a
North America distribution deal with Barton for its garnet
According to Nordic’s second-quarter interim
report, the company is targeting 1.5 million tpy of
run-of-mine production and sees an opportunity to target
garnet sales of 300,000 tpy "within 10 years from commencing
The company expects rutile sales on the order of 30,525
tpy once the project is commissioned in 2021.
|Barge loads cargo at
Kenmare’s Moma jetty
As a key company for ilmenite exports to China, Base
Resources provides insight into the health of that most
important market throughout the year.
Base Resources said in its 2017 annual report that
"pigment demand continues to strengthen through the year
under review", and that the "ilmenite feedstock market
tightened as demand from the Chinese pigment industry
increased rapidly". Base added that ilmenite production from
China was suppressed thanks to low iron ore prices.
The report on markets concluded that "in the absence of
substantial new feedstock supply coming online, the titanium
dioxide feedstock market is expected to remain in a
structural supply deficit, providing an opportunity for
continued price strength in both ilmenite and rutile over the
Base operates its 100%-owned Kwale operation in Kenya,
which commenced production in 2013. The
operation’s wet concentrator plant processed
more than 11 million tonnes of ore in 2017, to produce
708,404 tonnes of heavy mineral concentrate. Mineral
separation resulted in a final 467,359 tonnes of ilmenite and
90,625 tonnes of rutile being produced in 2017.
Base Resources acquired the advanced mineral sands
exploration project 'Toliara Sands’ from
World Titane Holdings on December 19th 2017. The deposit,
which contains 857 million tonnes of ore at 6.2% heavy
minerals, is expected to be in production by 2021.
In 2016, the then-owner Word Titanium Resources (World
Titane Holdings subsidiary) reported a scoping study
production target of 12 million tonnes per annum of ore,
which would include a mixed rutile/zircon concentrate
averaging 66,000 tpa, whilst stockpiling around 670,000 tpa
As another key company for ilmenite exports to China,
Kenmare Resources provides further insight into the health of
the market throughout the year.
Kenmare Resources is an Irish incorporated mining company
with operations based in Mozambique. The
company’s Moma Titanium Minerals Mine produced
more than 1 million tonnes in the 12 months to August 2017.
In the third quarter of 2017, Kenmare produced 277,800 tonnes
of finished products, with 257,500 tonnes of this being
The third-quarter production report, issued in October
last year, said that these results are "keeping the company
on track for [its] highest ever annual production".
Iluka’s third-quarter 2017 rutile production
increased from the second quarter for both its Australian and
Sierra Leone operations in what the company says were
favorable market conditions.
Third-quarter production of rutile at
Australia’s Iluka, a global supplier of titanium
mineral sands, rose to 96,000 tonnes from 82,000 tonnes in
the previous quarter. Sierra Rutile, acquired by Iluka in
December 2016, contributed more than 50% of this total.
In addition, synthetic rutile production in Western
Australia rose to 58,100 tonnes in the third quarter from
46,100 tonnes in the second quarter.
In Iluka’s November 2017 investor day
presentation, the company gave its view that "this market is
broadly in balance." The company also noted that "in respect
to very high grade chloride feedstocks" such as rutile,
synthetic rutile and upgraded chloride slag, "conditions are
considerably tighter," adding that "new ilmenite mines will
ultimately be required to feed upgrading capacity."
Iluka announced in December of 2017 that its board had
approved the development of its Western Australian Cataby
deposit after signing offtake agreements for a minimum of
175,000 tpy of synthetic rutile.
The agreements, signed with various "established western
pigment producers," stipulate that customers have the
flexibility to take as much as 190,000 tpy, accounting for
around 95% of Iluka’s Synthetic Rutile kiln 2
Cataby is expected to produce an average of 370,000 tonnes
of chloride ilmenite, which will underpin SR2’s
production. In addition, the deposit is to produce around
50,000 tpy of premium-grade zircon and around 30,000 tpy of
The mine plan for development of the Cataby project has
estimated that construction costs will be A$250-275 million
While Iluka’s ilmenite production is
primarily used internally, it is nevertheless useful to
consider it in context of rising demand on TiO2.
In addition to Cataby, Iluka is also looking to complete a
DFS into the expansion of upgrade of Jacinth Ambrosia
facilities, which would result in a ~30% increase in ore
throughput to offset declining ore grades. The project is
expected to be completed in Q2 2019.
Additionally, Iluka is looking to improve its Sierra
Rutile operations. Firstly, a DFS is under way assessing a
doubling of ore-capacity at Lanti Dry. The project would
entail the construction of a second in-pit mining unit and
additional concentrator capacity, bringing ore throughput up
from 500-600 tonnes per hour up to 1000-1200 tph. Iluka is
also looking to expand its Gangama mine from 500-600 tph ore
to 1000-1200 tph ore, with an expected commissioning date of
With a PFS anticipated for completion early this year, the
company is looking to develop the Sembehun Mine by H2 2020.
This would add an initial 1000-1200 tph ore to
Finally, Iluka has planned the expansion of its Sierra
Rutile mineral separation plant, from 175ktpa to up to
300ktpa rutile by mid-2019.
So while Iluka is currently forecasting a decline in
natural rutile production in 2018, by 2020 Iluka may be
producing over 250,000 tpy of rutile.
*The author has specified metric as opposed to long tons,
which were being used at the time, and from which conversions
have been made.