Spain’s CFM Minerales has agreed to an additional offtake of zircon from Sheffield Resources’ Thunderbird mineral sands project in Western Australia.
CFM plans to purchase a further 1000 tonnes of zircon from the in-development site in the Pilbara region.
The deal adds to a previous agreement for an annual supply of 4000 tonnes of zircon that was signed in 2017.
CFM’s total offtake volume now represents eight per cent of total stage one production volume at Thunderbird.
Sheffield managing director Bruce McFadzean said the company had secured offtake for 100 per cent of stage one zircon and ilmenite produced at the project, reducing market and revenue risk.
“With the consensus view that significant supply shortages and strong pricing is expected to continue in the mid-long term, the mineral sands industry looks to be in a robust position,” McFadzean said.
“The majority of our revenue from Thunderbird is derived from zircon products. Zircon pricing has steadily increased over the years and with the long-term inducement price unchanged from previous reports at US$1469 ($2180) per tonne FOB (free on board), the industry appears very stable moving forward.”
Sheffield’s flagship project is expected to have a 42-year mine life and has one of the world’s largest and highest grade zircon and ilmenite-rich mineral sands ore reserves.
“Current Australian premium zircon production is estimated to be significantly reduced by 2027 as the present operations, heavily contributing to the global supply of premium zircon, are mined out,” McFadzean said.
“The timing of this significant supply decline bodes well for the Thunderbird project production past construction.”