LOS ANGELES Rio Tinto Plcs iron and titanium unit,
Rio Tinto Iron & Titanium (RTIT), will suspend
prefeasibility studies currently under way for the
TiO4 program aimed at expanding its titanium mining
and smelting capabilities in Canada, Madagascar, Mozambique and
South Africa, according to a company spokesman.
Among the components involved in the study was a greenfield
smelting facility in Canada, the spokesman confirmed. This
presumably would have involved operations for upgrading
ilmenite ore into slag, eventually producing an upgraded slag
product with a titanium dioxide content greater than 90
percent. While the spokesman said Rio Tinto never
disclosed an official cost estimate for a new smelter in
Becancour, Quebec, local reports indicated it could have cost
up to $4 billion.
The spokesman pointed out that RTITs decision wont
affect current exploration activities in Mozambique or
expansion of the Zulti south mine in South Africa designed to
increase the output of heavy minerals, including ilmenite used
to produce titanium dioxide feedstock and pig iron.
While the spokesman gave no reason for the suspension,
its widely attributed to weakening demand for pigment,
which is estimated to account for at least 90 percent of the
global market for titanium dioxide compared to about only 5
percent for titanium metal.
After a run up in late 2011 and early 2012, prices for the
high-grade feedstock thats favored by the titanium
industry have fallen by at least 30 to 40 percent, according to
Jacko Preyser, RTITs general manager of sales and
marketing, told the International Titanium Association
conference in Atlanta in October that the company was
undertaking feasibility studies at its mines and smelters to
boost its titanium dioxide capacity by 40 percent.
Preyser said then that global demand was expected to grow by 50
percent by 2020, stressing that, even including projected
expansion projects both committed and uncommitted,
demand was expected to outpace supply in the foreseeable
He noted that the flat prices that characterized the feedstock
market from the early 1990s through the first decade of this
century encouraged only minimal investment in the
feedstock industry, resulting in tight supply that
supports a firm pricing environment going forward,
benefiting high-grade material in particular.