The company on Wednesday announced it had processed the first ore at its wet concentration plant near Shark Bay — the first phase of a two stage ramp-up, with Strandline still finishing work on its mineral separation plant.
Once the separation plant at Coburn is complete, the heavy mineral concentrate from the wet concentrator will be further processed to produce the final products of chloride ilmenite, rutile, premium zircon and zircon concentrate.
“It’s a massive milestone and it’s in a really exciting critical minerals space with zircon, titanium, and we’ve also got exposure to rare earths in the form of the monazite mineral,” Mr Graham told The West Australian.
“We’re really now just focusing on ramping the project up well over these next few months leading up to Christmas and beyond into the new year.”
Mr Graham said there was huge demand for mineral sands, with Strandline having pre-sold 100 per cent of its product for the first five years of production to a diverse range of companies.
“They’re all the big end of off-takers around the world . . . we’ve got about 80 per cent of our revenue going off to Europe and America, and then we’ve got the balance of it going into China,” he said.
Strong medium to long-term demand from the global companies is pushing Strandline to consider expanding production, Mr Graham said, amid concerns of a supply deficit.
Even though demand had “softened a little bit” over the last quarter, Mr Graham said prices were forecast to hold up through the rest of the year and beyond.
“It’s great timing even though the markets are a bit jittery right now. This is a 30-40 year resource so it’s a generational project,” Mr Graham said.
Morgans analysts said downstream global suppliers had recently noted evidence of softening demand for mineral sands — particularly in Europe and Asia — linked to housing softness in housing and construction markets.
“Market volatility, if it did unfold, doesn’t solve for the ongoing structural supply deficit in these markets, and in turn would further pressure on supply, amplifying upside pressure on price for when conditions normalised,” the analysts said.
“As such we think that compelling price dynamics can persist into the medium term and that current AUD weakness also provides a significant buffer.”
Coburn was delivered on time and budget despite inflationary pressures and labour shortages experienced across the WA mining sector.
It is expected to generate 230,000 tonnes of heavy mineral concentrate each year over an initial 22.5 year mine life, supplying about 5 per cent of world zircon and 10 per cent of world chloride ilmenite demand.
