Zircon supply will only get tighter...
Gavin Diener of consultancy TZMI warned that zircon
production was falling due to depletion of ore at existing
projects, and forecast an increasing shortfall despite stable
Miners tend to focus their efforts on the highest-grade part
of the deposit, meaning that the rate of mineral sand
production peaks early in the life of a mine. As time goes on,
the rate of production falls.
Diener said that because most operational mineral sand
facilities were advanced in their lifespans, the overall rate
of production was falling.
TZMI estimated that there was a total of 1 million tonnes of
new zircon supply in the planned mineral sand projects
currently at project stage. But only "a small subset" of these
mines will reach production in the next five years, due to
technical, political and environmental factors.
"History shows that new supply arrives later than expected
by project developers," Diener said.
As a result, total zircon production was expected to fall to
below 1 million tonnes per year by 2024. In comparison, TZMI
foresees demand at more than 1.2 million tonnes in 2020,
although Diener admitted that the short-term demand outlook was
And Beth Xiang from mineral consultancy Ruidow reported
that local Chinese zircon production plummeted in 2019, after
mining almost halted in Hainan province, which previously was
responsible for about 90% of China’s zircon
Total Chinese zircon production in 2018 was estimated at
150,000 tonnes by the US Geological Survey.
Hainan has been designated a future free-trade zone, to
focus on trade, financial services, and service industries, and
this will lead to mine closures.
Xiang said that 2019 zircon production in Hainan was
estimated to be less than 10,000 tonnes, and said that "Chinese
domestic zircon sand will basically disappear in the
...But demand is sluggish or falling
Lincoln Ying, chief executive officer at Matrix, one of
China’s largest producers of zircon opacifiers,
painted a gloomy picture for demand.
He forecast that demand would fall to 1 million tonnes in
2019 and to 850,000-900,000 tpy for the "next couple of years."
That compared with peak demand of 1.6 million tonnes in 2011,
he told conference attendees.
"We do not expect an increase in demand over the next few
years," Ying said, pinning the decline in demand on
substitution of the material in the tile industry in China and
elsewhere since 2011.
The outlook from other speakers was slightly more sanguine,
with Beth Xiang suggesting that demand from the housing sector
meant that Chinese zircon demand would hit 640,000 tonnes in
And Gavin Diener expected demand to move only slightly lower
in 2019, to a little less than 1.2 million tonnes, but
recovering to more than 1.2 million tonnes in 2020, the highest
demand volume since at least 2016.
"[This year] has been a very different year [compared with]
2018," Diener said, citing global uncertainty and lower demand
for zircon since the third quarter of last year.
Water shortages could threaten zirconium
Alister MacDonald, general manager of marketing at miner and
explorer Alkane Resources, warned of the danger to the
zirconium industry posed by water shortages.
China produces 200,000 tonnes of zirconium oxychloride per
year, MacDonald said. This industry consumes 130,000 tonnes of
zircon. But production results in waste outputs of uranium and
thorium, and involves high consumption of water.
And around two-thirds of Chinese production is concentrated
in so called "dry provinces" which are particularly dependent
on water from underground reserves, rather than surface water.
These include Shandong, which alone produces 52% of the
MacDonald noted that around one-third of the Chinese
zirconium oxychloride industry was shut down by environmental
controls in April 2017, when the government cracked down on
MacDonald warned of a "high risk" of further plant closures,
due to water shortages and pollution constraints. He believed
that this pressure will drive further consolidation in the
Producers hope new applications will drive fresh
Matrix’s Ying said that the development of new
applications for zircon could be crucial to sustained demand in
the years to come.
Prospects for new applications are seen as centered on
zirconia, the pure form of zirconium dioxide, and zirconium
TZMI’s Diener saw the zirconia and chemical
sector as the fastest growing end-user of zircon between 2016
Roberto Dante, CEO of the scientific consultancy 2D to 3D,
saw potential markets for high-value zirconia chemicals being
driven by the developing new-energy and carbon reduction
These markets included the use of zircon as a breeder for
tritium in reactors, in the sequestration of carbon from the
atmosphere, and in solid state lithium-ion batteries.
But Dante noted that the scale of demand could be limited by
the potential for recycling.
And he added that some of these end-uses could be
"antagonistic" - for example, the widespread adoption of
nuclear power could limit demand for carbon capture.
Simon Marshall, managing director of Independent Nuclear
Expertise, said that zirconium demand from the nuclear industry
was likely to remain steady over a long period of time.
This demand was driven by the need for reliable
non-fossil-fuel power, and the fact that existing nuclear
infrastructure is ageing.