Wednesday, November 5, 2008

TRIMEX to invest Rs 2,250 cr in ilmenite mining

TRIMEX Industries (Prasad Koneru Managing Director) announced that it will commence ilmenite mining operations in the next two months in the Srikurmam district of Andhra Pradesh, where it plans to invest Rs 2,250 crore.

The area has proven reserves of 5.5 million tons of ilmenite and about 50 per cent of the land area specified in the mining lease was owned by the government. TRIMEX would be executing mining operations and related projects through its wholly owned subsidiary, TRIMEX Sands.
The current capital expenditure stands at Rs 250 crore and was expected to climb to Rs 2,250 crore in five years.

TRIMEX would hold the mining lease for a period of 30 years from the date of the lease award and was renewable for another 30 years.

Ilmenite is used to produce titanium dioxide, a key ingredient in creating white pigments in high quality paints, paper and plastics. Ilmenite is also used as an intermediate feedstock in the manufacture of titanium metals.

Pradeep Koneru, executive director, TRIMEX said: “Through this secure supply of ilmenite, TRIMEX will be one of the lowest cost titanium dioxide manufacturers globally, by value adding and integrating our operations throughout the supply chain. To this end, we are working to ensure that prices remain competitive to benefit the end-user.”

The value addition study is being conducted by TZMI, an independent consulting firm, specialising in the mineral sands and titanium dioxide pigment industries.

The company’s site facility has a capacity to produce 200,000 tons of ilmenite per annum and is expected to produce 65 per cent of that capacity in the first year of operations. Also, the facility would have an annual capacity to produce 80,000 tons of garnet, 80,000 tons of sillimenite, 6,000 tons of rutile and 6,000 tons of zircon.

TRIMEX Industries signed the memorandum of understanding (MoU) with the government of Andhra Pradesh in January 2001 to develop beach sand minerals. Under the MoU, TRIMEX has two more prospecting licenses for 40 sq km in areas adjacent to Srikurmam. The prospecting licenses will enhance the current economies of scale.

The global consumption of titanium dioxide pigment is projected to increase at a CAGR of three per cent from 4.96 million tons in 2008 to 6.25 million tons in 2015.

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