Gulo,
Interesting story on TIC in Canadian business. (BTW did you see CWPC the last few days?)
Essential minerals
by Jeff Sanford
Titanium Corp. hopes to cash in on the oilsands.
2005-01-31
For those unfamiliar with the family of heavy minerals, titanium dioxide is a compound derived from titanium, and is used as a whitening pigment in paint, paper and cosmetics. That means the world uses a lot of it--four million tonnes annually, in fact. Zircon is another heavy mineral basic to manufacturing--it's used in the production of television and computer screens--which explains its huge worldwide production of 910 million tonnes each year.
Supply of heavy minerals, then, is vital to modern life. But they can also be difficult to get. The largest deposits of titanium are in remote areas of South Africa and Australia, where they usually exist in concentrations of 2% to 4%. Getting the stuff out of the ground requires massive mining operations, and, in the case of zircon, there could be a shortage on the horizon, as existing mines mature.
But there's one global source yet to be developed, and it could seriously shake up the market. Syncrude Canada Ltd.'s massive oilsands operation outside of Fort McMurray, Alta., pulls hundreds of thousands of tonnes of sticky goo from the earth every day. Once the oil is extracted, the leftover sand is dumped into a tailing pond--which is rapidly becoming a lake as the oil producers work through the 300 billion barrels of oil trapped in the sands.
That's splendid news for Titanium Corp. Inc. (TSXV: TIC), a Canadian company that has developed a proprietary process for extracting titanium-bearing minerals and zircon from oilsand tailings, which contain heavy minerals in concentrations up to 33%. Basically, the business is about dipping a pail and then sifting and drying out titanium-bearing minerals and zircon. Put it in a bag; send the invoice. "We hook our input pipe up to their output pipe and that's it," says George Elliott, chairman and CEO of Titanium Corp. "It's an attractive business case."
Well, as long as the odd dynamics of the titanium market can be harnessed successfully. As an element, titanium (22 on the periodic table) is basic to many downstream production processes, but there are only about five buyers of the stuff--basically, big chemical companies like DuPont. There are no spot markets for it, and standard procedure in the industry is to sign secret 10-to-20-year contracts to guarantee supply.
Essential minerals
by Jeff Sanford
Titanium Corp. hopes to cash in on the oilsands.
2005-01-31
…cont'd
Breaking into the club will take some fancy footwork and a soft touch, but Elliott is already in negotiations with several large buyers and has set a goal of supplying 8% of the world's titanium and 5% of its zircon.
The cheap extraction process and proximity of supply to big North American processors suggest a gleaming future for Titanium Corp. "The big users of titanium have always been looking for this," says Elliott. "It's what they want."
canadianbusiness.com
David |
