TNG has taken an important step forward in ensuring the validity of the Mount Peake vanadium-titanium-iron project thanks to a new binding offtake agreement.
Swiss market expansion specialists DiethelmKellerSiberHegner (DKSH) will purchase 100 per cent of TNG’s titanium dioxide product from the Northern Territory mine — equivalent of up to 150,000 tonnes a year — for global distribution.
The agreement represents a high-profile partnership for TNG and promising news for Mount Peake, which is still undergoing final approvals.
TNG’s initial product offering to DKSH will comprise of a titanium dioxide-based pigment for use in outdoor coating applications, before expanding to “other high-value niche companies”, according to a statement.
“DKSH has a track record in the distribution of Ti02 (titanium dioxide) and future sales from Mount Peake are synergic with the existing product offering addressed to the same custoemr base,” said Natale Capri, DKSH co-head business unit performance materials.
“DKSH’s customers worldwide will benefit from a reliable and steady supply of high-quality products.”
The pigment will be produced for DKSH using TNG’s proprietary Tivan hydrometallugical process at the company’s plant near Darwin Port.
The deal has been in the works for a while — TNG announced in October last year that the two companies had signed a binding term sheet setting out the key terms of the deal but this latest announcement has now finalised the agreement.
TNG managing director and chief executive officer Paul Burton said converting the binding term sheet into a binding offtake within the set timeframe was a “great achievement” for company and the Mount Peake project.
“DKSH is a great fit for us given the technological breakthrough we achieved last year with our ability to produce titanium dioxide pigments,” he said.
Mount Peake, around 235 kilometres north of Alice Springs, is set to become TNG’s flagship site once development has finished.
The company mandated KfW to raise up to $US600 million ($864 million) of debt financing in 2018 as part of Mount Peake’s financing package, and earlier this month signed a deal with contractor McMahon Services to develop the site’s accommodation, haul roads, water and power infrastructure, and several other facilities.
In addition to the DKSH deal, TNG has a 2015 offtake agreement in place for its vanadium product with Woojin Metals (minimum of 60 per cent of output), and a 2016 binding term sheet with Singapore-based Gunvor for iron products.
The company has two remaining environmental permits left to secure before it can begin production at the project. These permits are scheduled to be submitted in the current quarter.