Strandline Resources has reached an agreement to sell 100% of the ilmenite to be produced at its Fungoni mineral sands project in Tanzania to China’s Maoming Ubridge Group Mineral Industry Company.
The new offtake agreement covers the supply of ilmenite for the entire life of the mine and is considered to be a key development towards commencing production at the mineral sands project.
Strandline previously secured an offtake deal with Hainan Wensheng High-Tech Materials Company for the zircon-monazite planned for production at the mine earlier this year, while negotiations are underway for the sale of rutile.
Strandline Resources managing director Luke Graham said: “Establishing this strategic offtake relationship with Maoming represents another important milestone for Strandline, ensuring the company remains on track to commercialise what is the first in its pipeline of outstanding mineral sands assets in Tanzania.
“The agreement provides a strong endorsement of the Fungoni project and the high quality of the chloride ilmenite, which will be produced over the life of the mine.”
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Strandline has already received an environmental certificate for the project and is currently waiting on the approval of its mining licence.
A funding decision is set to be made once the mining licence has been approved.
Initial estimates suggest that ilmenite production will account for 28% of Fungoni’s total revenue, while zircon-monazite production will contribute approximately 62% and almost 10% will come from rutile.
Strandline is also anticipated to benefit from a projected zircon structural supply gap this year.
The project is located roughly 25km from the Dar es Salaam port and will be developed at an estimated cost of $30m.