Sheffield Resources has secured an offtake agreement for the sale of unroasted primary ilmenite from its Thunderbird mineral sands project in Western Australia.
As part of the agreement, Bengbu Zhongheng New Materials will receive an annual supply of 650,000 tonnes of primary ilmenite for seven years, representing all of the estimated volume of primary ilmenite to be produced during the first stage of Thunderbird.
Pricing for the agreement will be based on Thunderbird primary ilmenite pricing linked to a market reference ilmenite and its prevailing United States dollar market price, which will be negotiated quarterly.
The agreement is set to enhance Thunderbird’s finances by generating additional revenue from primary ilmenite sales and complementing its previously announced bankable feasibility study (BFS).
The BFS targets a material reduction in project capital by deferring the low temperature roast (LTR) of ilmenite circuit, while maintaining overall revenue by replacing LTR ilmenite revenue with increased zircon production.
Sheffield Resources managing director Bruce McFadzean said the offtake agreement with Bengbu for 100 per cent of stage one ilmenite was transformational for the Thunderbird project.
“This is the first of several exciting outcomes emerging from the updated BFS, which is running in parallel with the strategic partner process,” he said.
“Essentially, we are seeking to replace LTR ilmenite revenue with revenue from additional zircon production. The revenue from the primary ilmenite sales is an added benefit, which will further enhance project economics.”
McFadzean said the emerging global growth in the chloride slag market enabled financial benefit from the sale of the primary ilmenite.
Bengbu, the world’s largest producer of fused zirconia, plans to use Sheffield’s primary ilmenite in the production of chloride slag, a material in high demand for the growing market of chloride pigment production.