Perth-based Doral Mineral Industries Ltd has moved to shore up its burgeoning mineral sands mining and zircon production business by taking a 9 per cent stake in Queenslander Diatreme Resources Ltd, and its huge Eucla Basin project.
Perth-based Doral Mineral Industries Ltd has moved to shore up its burgeoning mineral sands mining and zircon production business by taking a 9 per cent stake in Queenslander Diatreme Resources Ltd, and its huge Eucla Basin project.
Doral, an unlisted public company owned by giant Japanese trading company Iwatani International Corp, will pay $2.1 million for the stake and become the zircon explorer’s largest shareholder.
Diatreme managing director Tony Fawdon told WA Business News the cash injection would allow the company to ramp up its 10,400 square kilometre Eucla Basin mineral sands project, which extends in an arc around the outskirts of the Nullarbor Plain from Ceduna in South Australia to Balladonia in Western Australia.
The funds will be used to drill an initial 10,000 metres in an area previously identified by BHP and surrounded by about 21,000sq km of tenements held by Iluka Resources Ltd, the world’s largest zircon producer.
The initial drilling will be followed up by a further 30,000 metres by the end of the year.
“Diatreme’s mineralised zone is on a major [mineral sands] strand line, which is about 800 kilometres long in the main section. Iluka has 350 kilometres of it and we believe that about 280 kilometres of the strand line runs through our tenement,” Mr Fawdon said.
“We believe BHP’s drilling only touched the surface and there will be greater mineralisation at depths of around 100 metres, with grades up to a high 5 per cent zircon expected in intercepts.”
Doral executive director George White, who will join the Diatreme board, said the move into the Brisbane-based company was a strategic one.
“It’s a business we know a lot about. We want to encourage exploration and invest in it,” he said.
Mr Fawdon said there was continuing strong demand for zircon, which is used in electronics, television and computer screens, ceramics, chemicals and zirconium metals favoured for their resistance to extremes of heat or cold, with most of the demand originating from China, South-East Asia and Japan.
Zircon prices have risen from $US240 a tonne since 2002 to around $US650/t, with spot prices of $US1,000/t.
Since establishing its operations near Bunbury in 2001, Doral has moved quietly to become a major, fully integrated producer of zircon and other downstream mineral sands products for the international market.
In that time, it has lifted annual turnover from about $10 million to $80 million, generating pre-tax profits of $10 million in recent years. It still has 12-14 years’ resources near Bunbury.
Doral recently took its 33.3 per cent stake in advanced Rockingham industrial minerals company, Australian Fused Metals, to 100 per cent and acquired a complementary Bunbury chemical processing plant from Millennium Chemicals, since renamed Doral Specialty Chemicals, which is also operating profitably.
Iwatani is a major industrial public company, mainly operating in the energy, housing, industrial gases, machinery and materials sectors. It has been a major trader of zircon, other minerals, LPG and industrial gases for over 30 years.
