Garnet plant moves Mineral Commodities up value chain

WA-based Mineral Commodities has penned an offtake and funding agreement to progress its pivot towards becoming a supplier of high-value finished products, rather than just a producer of mixed concentrates.

Under the agreement, Garnet International Resources will provide a US$10 million (AU$15 million) five-year-loan on commercial terms to fund a garnet and ilmenite mineral separation plant at the Tormin heavy mineral sands operation in South Africa.

Tormin, in South Africa's Western Cape province, is said to host some of the highest-grade mineral sands in the world and supplies about a quarter of the global demand for garnet sands. It is wholly-owned by Mineral Sands Resources (MSR), which in turn is currently 50 per cent owned by Mineral Commodities. However, Mineral Commodities last month signed an agreement to up its stake in MSR to 69 per cent.

Garnet International is a member of the GMA Garnet Group, which claims to be the global leader in industrial garnet and the only global supplier to manage the garnet supply chain from mining to international distribution.

Garnet is used for industrial water-jet cutting, blast cleaning and polishing, in addition to water filtration. Ilmenite is a titanium-iron oxide material used in stone cutting and for the manufacture of metal components that require durability at a lighter weight.

We are very pleased to finalise the GMA agreements, crystallising our long-term partnership with GMA Group and Tormin's transition from concentrate to higher margin finished product sales. This offtake agreement forms the foundation of expanding our revenue base, profitability and cash flows at Tormin.

GMA will provide MSR with the loan funding – repayable over five years on commercial terms – to build the plant, which is scheduled to be completed by next year's first quarter. In return, MSR will supply GMA with finished garnet product, rising from 80,000 tonnes per annum from 2024-25 to 125,000 tonnes a year between 2029 and 2033.

To illustrate the significance of the GMA deal, Mineral Commodities noted that Tormin produced 179,000 tonnes of garnet concentrate last year.

The company produces garnet and ilmenite concentrates and zircon and rutile through the Tormin operation. In Norway, it owns the Skaland graphitic operation that produces the only flake graphite in Europe.

Last year, it released a strategic plan to implement its goal of becoming a leading, vertically-integrated diversified producer of graphitic anode materials and value-added mineral products.

As part of its strategy, Mineral Commodities is also developing its Munglinup graphite project, about 100km west of Esperance. Munglinup has a JORC mineral resource estimate of 7.99 million tonnes for 12.2 per cent graphitic carbon.

The company's ultimate goal is an integrated downstream operation to produce graphitic anode products for the burgeoning lithium-ion battery market.

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