By Marcel CHIMWALA
Malawi is traditionally an agricultural country with tobacco as the main stay of the economy. However, the mining industry has captured attention in the year 2022 thanks to ASX-listed Sovereign Metals’ discovery of the world’s largest natural rutile deposit at Kasiya in Lilongwe District.
With Kasiya continuing to capture news headlines and social media talk in the country as many Malawians are eager to see the project move to production to significantly contribute to sustainable economic growth and poverty alleviation. State President Dr Lazarus Chakwera highlighted the project when he addressed the United Nations General Assembly in New York, USA.
“We are delighted that many private sector investors are flocking to join the agricultural revolution that is coming to Malawi as well as investors in mining who know that the recent discovery in Malawi of the largest deposit of rutile in the world means that Malawi’s economic rise is imminent,” said Dr Chakwera.
Managing Director for Sovereign Metals Dr Julian Stephens hails the recognition of the project at such an important global forum describing it as a terrific endorsement of the Kasiya discovery and its immense potential.
“Sovereign appreciates the great support it has received from the Malawi Government and we look forward to making a significant contribution to development of the mining sector and achievement of the country’s economic vision,” he says.
The recent Expanded Scoping Study (ESS) confirmed Kasiya as a large-scale, long-life operation with a low-cost profile and future significant source of critical raw materials.
Stephens says the globally significant project has the potential to become a major producer in both the natural rutile and graphite markets whilst contributing significantly to the economy of Malawi.
He says: “Kasiya is a greenfields discovery in central Malawi which is now the largest natural rutile deposit and also one of the largest flake graphite deposits in the world.”
“Sovereign is aiming to develop an environmentally and socially sustainable operation to supply highly sought-after natural rutile and graphite to global markets.”
Stephens explains that Kasiya will be a simple and conventional operation using traditional and well-developed processes used across the globe on numerous mineral sands and graphite operations.
He says the proposed large-scale operation will process soft, friable mineralisation that occurs from surface in an area with excellent access and water availability.
The mining project will benefit from high quality surrounding infrastructure including hydro-sourced grid power, bitumen roads and recently upgraded rail lines connecting to the deep water ports of Nacala and Beira in the Indian Ocean.
Development and Exploration
Sovereign says in its recently released Annual Report for 2022 that the year has been very successful for the company in exploration, mineral resource development and initial economic studies citing that[JS1] :
- MRE update confirmed Kasiya as the largest rutile deposit ever discovered with 1.8 Billion tonnes @ 1.01% rutile and 1.32% graphite (Indicated + Inferred) equating to 18 million tonnes contained rutile and 23 million tonnes contained graphite.
- The updated MRE confirmed Kasiya as the world’s largest rutile deposit and also one of the largest flake graphite deposits globally.
- Expanded Scoping Study (ESS) results confirmed Kasiya as an industry-leading major source of critical raw materials as one of the world’s largest and lowest cost producers of natural rutile and natural graphite with a carbon-footprint substantially lower than current alternatives.
- The ESS demonstrated outstanding results including:
– A two-stage development with full production at 24Mtpa operation producing 265kt rutile and 170kt graphite per annum with a 25 year mine life.
– Exceptional economics including a post-tax NPV8 of US$1,537m and post-tax IRR of 36%.
– A large-scale operation with a low-cost profile resulting from the deposits near surface nature, grade, conventional processing and excellent existing infrastructure.
-Conservative assumptions applied with long-term prices used discounted against current spot prices.
– Highly strategic project and a potential major source of raw materials deemed critical to the decarbonisation of the global economy.
- Pre-Feasibility Study (PFS) commenced with a 12,000m drilling program now completed and key globally recognised consultants appointed to the study team.
Sales and Off-take Marketing
Meanwhile, Sovereign Metals has entered into a non-binding memorandum of understanding (MoU) with a market leader Hascor International Group for potential supply of 25,000 tonnes of natural rutile from Kasiya per annum over a five year period.
Stephens explains that the MoU is part of Sovereign’s product marketing strategy as the demand and pricing for natural rutile are both very strong as the global structural deficit in supply continues to widen.
Sovereign Metals has also signed an offtake MoU and Market Alliance with major Japanese global trading and investment company, Mitsui & Co Ltd (Mitsui). The MoU establishes a marketing alliance and potential offtake for 30,000 tonnes of natural rutile per annum.
“The alliance will allow Sovereign to leverage off Mitsui’s extensive network and their market-leading understanding of the titanium industry and global logistics,” says Stephens.
Sovereign Metals observes in the Annual Report that in 2022 demand for high-grade titanium dioxide feedstocks continued to remain strong, and along with supply shortages leading to continued rutile price appreciation, with realised prices of +US$1,500/t recorded in the June 2022 quarter and spot price currently +US$2,200/t.
The Natural rutile market is in structural deficit with current global supply estimated to decline 45% in the next three years with graphite demand also set to soar as electric vehicle production is forecast to increase 12-fold by 2040
Low Carbon Advantage for Two Critical Raw Materials
Like many other industries globally, the titanium dioxide pigment industry is targeting reduced carbon emissions, reduced energy consumption and a move towards renewable energy and waste minimisation. Sovereign says in the Annual Report that a shift towards a greater percentage of natural rutile feedstock offers the titanium pigment industry a simple and short lead-time opportunity to significantly lower its carbon intensity and total environmental impact.
Sovereign’s natural rutile product is expected to have substantially lower Global Warming Potential (GWP) (Scope 1, 2 and 3 scope emissions) when compared to other titanium feedstock alternatives produced by upgrading ilmenite (i.e., synthetic rutile and titania slag). Using natural rutile from Kasiya as titanium feedstock for the chloride pigment process would significantly reduce Scope 1, 2 and 3 greenhouse gas emissions.
Titanium feedstock is a key component of various industrial and consumer products. Therefore, utilising natural rutile such as from Kasiya as direct use titanium feedstock could hold the solution to developing low-carbon footprint products including low carbon paints.
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