Titanium Sands has taken another step towards securing a mining licence for its heavy mineral sands (HMS) project on Sri Lanka’s Mannar Island after lodging a formal submission with the country’s Central Environment Authority (CEA).
The company says its completed basic information questionnaire is a key part of the environmental impact assessment (EIA) process for the operation it has outlined to have a stage-one net present value of $545 million.
Management recently revealed that its final exploration reports had been evaluated by the Sri Lankan Geological Survey and Mines Bureau (GSMB), which concluded that the Mannar Project had potential economic viability for mining.
The GSMB subsequently approved the project for environmental assessment.
The CEA, alongside EIA consultants and Titanium Sands’ Sri Lankan staff members, also recently made a formal site visit to Mannar Island as the company continues to push its mining case. Management is now expecting a terms of reference letter from the CEA, which will outline any remaining environmental factors to be addressed.
Upon completion of the environmental study, the CEA will make a recommendation for the GSMB to grant a mining license.
Titanium Sands recently confirmed the stage-one project’s $545 million net present value, with a total gross project revenue of $2 billion and total net revenue of $1.28 billion. The project has been estimated to have an internal rate of return of 52 per cent and is expected to employ up to 1200 people when fully operational.
The company holds a 100 per cent interest in five exploration licences for HMS on Mannar Island and the adjacent mainland coast of north-west Sri Lanka. It is focussed on developing high-grade, high-value and easily-minable HMS deposits, with modest capital requirements.
Management acquired the Mannar Island project in December, 2018 and made a further acquisition of adjacent tenure in March, 2020.
The company recently received a major boost to its development plans through updated Sri Lankan government legislation designed to promote investment in the HMS industry and its exports. It is part of the government’s bid to move towards a more export-based economy and it has set targets to generate a further US$3 billion (AU$4.71 million) in exports and US$3 billion (AU$4.71 million) in direct foreign investment.
The government’s position on HMS sands project development is that the export of raw or concentrated minerals should not be permitted without value-addition and that exploration or mining licences should only be issued to investors willing to produce value-added products locally.
Titanium Sands believes the government’s proposed initiatives will promote investment in HMS production in Sri Lanka and will assist the company’s operations as its project moves towards production – specifically with respect to a two-year export approval process that would buy time for the required studies into creating local processing and value-adding industries.
The company views Mannar Island as an ilmenite feedstock project with minor credits from other mineral components. The high-quality ilmenite product is expected to find a ready market, with titanium slag and sulphate route pigment producers in the Middle East, Korea, India, China and elsewhere.
Mannar Island is the biggest of a chain of sand islands and shoals that extend more than 100km west from Sri Lanka to southern India in a broad arc. It is a geologically-young feature formed by gradual northward sediment transport and accumulation along the north-west coast of Sri Lanka, which has concentrated HMS along the beaches and coastal dunes of Mannar Island.
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By Doug Bright
