The international owners of the Tiwest titanium-dioxide plant near Bunbury have announced plans to proceed with a $100 million expansion to meet increasing demand in the Asia-Pacific region.
US titanium dioxide producer Tronox Inc and South Africa's diversified mining group Exxaro Resources said they have approved the expansion.
The $100 million project will increase the plant's current annual capacity from 110,000 tonnes per year to around 150,000 tonnes per year.
Exxaro will provide the ongoing funding for the expansion and additional capacity is expected to come on line in early 2010.
Tronox has the option to contribute its share of capital at its discretion throughout the project and until a date two years from commissioning, which will be taken into account when calculating its final interest in the expanded production.
Oklahoma City-based Tronox, the world's third largest titanium dioxide producer, has been grappling with weak demand due to the slump in the North American housing market.
Titanium dioxide constitutes more than 90 per cent of Tronox's annual sales, and the company expects worldwide demand for the pigment to increase more than three per cent this year, despite the US slowdown.
The increased titanium dioxide capacity will be channelled toward Asian and Australian markets, where demand for the whitening agent used in paints, plastics and papers is growing.
Tronox began to raise titanium dioxide prices in all markets late last year, but the increases are still trying to gain traction in some places since certain customers have price protection guarantees.
