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 industry sources.
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 future.
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.