Tronox defers WA mine, opts for NSW expansion

Mineral sands miner Tronox has decided to proceed with a new mine in NSW, leaving its two prospective Western Australian mines near Dongara and Cervantes in the development queue.

The New York-based company has chosen to spend $US144 million ($A218 million) developing its Atlas-Campaspe mine north of Broken Hill in western NSW.

The new mine will progressively replace production from its nearby Ginkgo and Snapper mines, where reserves are beginning to deplete.

Managing director Australia Russell Austin said Atlas-Campaspe was the right mine for now but Dongara would most likely be the company’s next mine.

“Dongara is one that we are putting more time and energy and resources into,” Mr Austin told Business News.

“The next mine may come from Dongara, it most likely will.

“I think Dongara is one of those projects that is more when, rather than if.”

He added that preparatory work was also continuing at its proposed Cooljarloo West mine site inland from Cervantes.

The company’s decision comes more than two years after premier Mark McGowan announced the government had agreed to vary a long-standing state agreement to facilitate the two proposed WA mines.

Tronox's proposed Dongara mine was originally approved by former environment minister Albert Jacob in 2013 while the planned Cooljarloo West mine has also gone through the environmental approval process.

Mr Austin said existing mining operations at Cooljarloo, which have a mine life out to 2032, would continue unaffected by the NSW project.

The new mine would provide an assured feed for Tronox’s process plants in WA, notably its titanium dioxide pigment plant in Kwinana.

Tronox bought the NSW mining operations through its $US1.67 billion acquisition of competitor Cristal.

The merger made Tronox the second largest global producer of titanium dioxide and a top 10 mineral sands miner.

The group has 1,200 staff across Australia, including about 850 in WA.

Global chief executive Jeff Quinn said the group had recently increased the expected synergies from the merger.

It has achieved synergies of $89 million in the first year and anticipates annual savings will increase to $325 million by 2022.

Mr Quinn said most of the savings had come from adopting operational best practice across its various sites and from supply chain savings in areas like shipping, trucking and warehousing.

Following the merger, about a third of the group’s revenue, which totalled $US2.6 billion last financial year, and a third of its profit was generated in Australia.

Mr Quinn will visit Cooljarloo this week to celebrate the 30^th anniversary of mining operations.

He said coronavirus had been a slight positive for Tronox, as competing Chinese supply had fallen.

Longer term, he did not anticipate a big impact on the company.

“We don’t see it yet as a major headwind.”