As the No. 1 TiO2 producer in China, Sichuan Lomon Group (Sichuan Lomon) produced about 180 thousand tonnes of TiO2 in 2012 and its TiO2 capacity will reach 300,000t/a in 2013, ranking No. 6 in the world. With the rapid growth in capacity, except its ilmenite plants in Panzhihua City and Xiangfan City, Sichuan Lomon needs to seek sufficient ilmenite resources to guarantee its TiO2 production, according to CCM’s monthly report, Titanium Dioxide China Monthly Report, released in April.
Under the circumstance of shortage of ilmenite resources in the domestic market, seeking ilmenite abroad is an option. It is reported that Sichuan Lomon has cooperated with World Titanium Resources (WTR) to jointly develop the world-class Ranobe Mine in south western Madagascar.
According to the memorandum of understanding it signed with WTR, Sichuan Lomon will offer all of the capital needed to develop the 800,000t/a ilmenite project at Ranobe, which is estimated to be around USD309 million. As return of the capital, Sichuan Lomon will acquire 50% equity in the Toliara Sands Project. Except for capital contribution, Sichuan Lomon will also be responsible for final decisions regarding technical matters in relation to ensuring that the construction, plant and equipment meet the industry standards. Final decisions on community and government matters will rest with WTR. The Board of Directors of the joint venture consists of three members from Sichuan Lomon and three members from WTR with equal voting rights.
The first scale of the project will be 800,000t/a of ilmenite and 88,000t/a of zircon rich concentrate. The production will be aligned with the increased demand for sulphate ilmenite from Sichuan Lomon. Furthermore, Sichuan Lomon has the prior right to purchase 80% of the ilmenite output from Ranobe. In detail, if the prevailing market price is over USD206/t, all Ranobe ilmenite sold to Sichuan Lomon should be 7.5% cheaper than the prevailing market price; if the prevailing market price is less than USD206/t, all Ranobe ilmenite sold to Sichuan Lomon should be 5% cheaper than the prevailing market price.
It is beyond doubt that the investment will guarantee the supply of ilmenite for Sichuan Lomon. It also demonstrates the comprehensive competitive ability of Sichuan Lomon. Whether the producers can grow bigger in the TiO2 industry depends on the scramble for ilmenite resources. However, the investment of Sichuan Lomon in the Ranobe project will make the competition with Iluka Resources Limited and Rio Tinto Plc more intensive.
Table of Contents of Titanium Dioxide China Monthly Report 1304:
Import volume of TiO2 down 24.66% while export volume down 5.93% in Feb. 2013
Import & domestic production analysis of titanium feedstock in Feb. 2013
Price update in April 2013
Henan Billions faced tough times in 2012
It takes time for domestic TiO2 producers to master chloride process technology
Blue Star NM is not urgent to strip its TiO2 assets
Fuming Hutong was ordered to suspend production
Sichuan Lomon cooperates with WTR to seek ilmenite resources overseas
Decor paper industry consumed 9.92% of domestic TiO2 apparent consumption in 2012
China automobile output increased by 12.7% in Q1 2013
Titanium Dioxide China Monthly Report, issued by CCM on 25th, is mainly comprised of five columns of news and reports related to TiO2 market, including “Supply & Demand”, “Company Dynamics”, “Upstream”, “Downstream” and “Price Update”. You can find out more business opportunities through the latest and helpful information provided in the report.
About CCM
CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals, CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis, and consultancy service.
For more information, please visit http://www.cnchemicals.com.
Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China
Tel: 86-20-37616606
Email: econtact@cnchemicals.com