Australian industrial minerals firm Andromeda Metals Limited said Monday that it has entered into an agreement for Direct Shipping Ore (DSO) of 405 thousand metric tons per annum of halloysite-kaolin product with Longyan Kaolin China, Beihai Kaolin, and Yamada Toskio Shoten.
The three Letters of Intent are for non-binding agreements to ship kaolin at AU$115 – AU$140/t CIF from the Poochera project in South Australia. Andromeda will ship Longyan Kaolin and Beihai Kaolin 200 thousand metric tons per annum of DSO, while Yamada Toskio Shoten has agreed to receive 5 thousand metric tons of DSO.
Andromeda indicated that Longyan Kaolin will utilize the company’s DSO in specialty ceramics, while Yamada Toskio Shoten expects to use the halloysite-kaolin to produce high-value ceramics for the domestic Japanese market.
Andromeda managing director James Marsh said the deals were proof positive of a strong demand for the firm’s kaolin product.
“Confirmation of the very significant market demand for this rare and high-value form of kaolin from our extensive resources located in South Australia provides Andromeda with the potential to become one of the world’s largest producers of halloysite-kaolin material, which is a very exciting position to be in.”
The firm says it is currently studying the DSO process to determine whether the method offers a better return than sale of processed material.
“The significant logistical advantages of selling the dry-processed material (approximately 60% less waste) will be compared with the DSO option that would provide an immediate receipt of revenues and have minimal capital expenditure requirements,” noted the firm in its press release.
Andromeda notes that the new LOIs join agreements made earlier this year to ship 307 thousand metric tons per annum of dry-processed mineral and 208 thousand tons per annum of wet-processed mineral to various buyers in China.
The firm also said it will soon commence exploration activities at Camel Lake and Mount Hope, the latter of which is the site of a reported historic non-JORC 12.2 million metric ton halloysite-kaolin resource.