Alkane Resources has passed significant milestone in the development of its Dubbo zirconium project, after announcing a joint venture to produce zirconium oxychloride at its plant in Kwinana.
Alkane said it had signed a memorandum of understanding with Mintech Chemical Industries for the JV, which will now commence a study to produce 10,000 to 12,000 tonnes each year of zirconium oxychloride from the Kwinana plant.
Those production levels would produce between $US40 million and $US48 million, and would require 25 per cent of the 1 million tonne per annum output from the Dubbo project, Alkane said.
“The MOU brings closer the development commitment for the DZP with a DFS expected to be released next month and production to commence possibly in late 2013 or early 2014,” Alkane’s statement said.
Zirconium Oxychloride is the primary chemical used to produce most downstream zirconium chemicals and zirconium metal.
The global 200,000 tonne per annum market is currently worth around $US800 million, with 90 per cent of that held by Chinese interests.
By close of trade today Alkane’s stock had gained 3.47 per cent, to trade at $2.09.