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Major zircon mine to start

PERTH-BASED Basin Minerals is expected to launch the world’s next major mineral sands project in Victoria, as sources diminish for the key mineral zircon.

Industry analyst David Archibald, of the broking firm State One, says that the market has overlooked the immense potential of the Douglas project, but with “industry participants well aware that it is the next major source of zircon world-wide to be developed”.

His confidence in Basin Minerals is supported by the completion of an alliance with E I Dupont De Nemours, the biggest producer of titanium pigment in the world.

While the alliance does not cover the Douglas prospect, and most other promising tenements held by Basin Minerals, it indicates the small Perth company’s standing in the global industry.

David Archibald says the zircon-rich Douglas deposits will give it a unique position in the world market.

He points out that the Western Australian producer Iluka Resources, currently producing nearly a third of the world’s zircon, faces declining prod-uction in the next few years (its Eneabba mine, turning out half the company’s zircon, is expect-ed to be exhausted within six years).

The Douglas project is the only one likely to be developed in the world with a high proportion of zircon and short-ages could occur, pushing up the price.

The ilmenite in the Douglas sands was of a quality that could accommodate changes in the processing of titanium pigment, another positive factor.

Basin Minerals has calculated that it will produce 300,000 tonnes a year of ilmenite, 60,000 tonnes of zircon and 40,000 tonnes of rutile, but Archibald predicts production will be much greater, providing very high returns.

He says they will be several times that of a proposed WMC project in Mozambique, where a similar sized venture could initially cost more than $700 million, compared with the esti-mated $200 million investment at Douglas.

The alliance with Du Pont covers only the Oakvale pros-pect in the South Australian sector of the Murray Basin.

Basin Minerals expects to release increased estimates of its mineral sands resource soon, on areas that include Douglas, which is close to Horsham, in western Victoria, and 150km from the port of Portland.

A decision on a likely feasibility study is likely in the next six weeks.

Meanwhile Magnetic Minerals is increasing its resource of mineral sands at Dongara, close to the Iluka Resources and Ticor tenements.

It has begun testing significant extensions to the existing mineralised strandlines after announcing that it had outlined a further 38km of potential targets.

The previously announced resource of 78 million tonnes with a grade of 3 per cent of heavy minerals was based on drilling of 8.5km of strike length.

A further 6km of strands were drilled for which resource estimates were not made, but they did reveal significant intersections.

Australia has traditionally been a leader in the world mineral sands industry (it was one in which world prices were quoted in Australian dollars, although this is less so now).

Its predominant position has been eroded in recent years by increasing competition, but the discovery of a new generation of deposits in Victoria, South Australia and Western Australia could restore some of its earlier reputation.

At one time, Australian miners were so aggressive that buyers called them “Antipodean Arabs” – a hint that they held control of mineral sands similar to OPEC’s over oil.

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