Mozambique: Chinese Companies to Operate Chibuto Heavy Sands

4 November 2014

Two Chinese companies on Monday signed a contract with the Mozambican government to exploit the titanium-bearing heavy mineral sands in Chibuto district, in the southern province of Gaza.

The two companies are the Anhui Foreign Economic Construction Group and Yunnan XinLi Non-ferrous Metals Co. Ltd. who are proposing to invest 471.4 million US dollars in Chibuto.

Under the contract with the government, according to a report in the daily paper “Diario de Mocambique”, the two companies are expected to extract a million tonnes of ilmenite (titanium iron oxide) a year for a period of 25 years.

Since the Irish company Kenmare Resources has the capacity to produce around 800,000 tonnes of ilmenite a year from its dredge mine in Moma district, in the northern province of Nampula, a million tonnes a year from Chibuto would make Mozambique far and away the largest producer of ilmenite in the world.

The Chinese companies won the fourth tender launched by the government for the Chibuto heavy sands. Originally the rights were given to the Australian company BHP-Billiton, but it withdrew in 2009.

Then, in April 2011 the rights were handed over to Rock Forage Titanium Ltd, a company formed by Canadian and Mozambican investors.

However, in November 2011 the government cancelled Rock Forage Titanium’s rights because the company failed to pay it the agreed signature bonus of 50,000 US dollars, despite repeated extensions to the deadline.

The government therefore had to lunch another tender, won by the Zambezi Delta Consortium which then had 180 days to negotiate with the government the terms and conditions for the project. But the company did not meet the deadline, and so the tender was annulled.

The sands at Chibuto contain known reserves of 72 million tonnes of ilmenite, 2.6 million tonnes of zircon and 400,000 tonnes of rutile.

This is enough to keep a mine in production for 30 years.

Ilmenite (iron titanium oxide) and rutile (titanium dioxide) are used to make white pigments for paints, paper and plastic. Titanium can be extracted from these ores and used to manufacture metallic parts where light weight and high strength are needed. Zircon (zirconium silicate) is used for abrasive and insulating purposes.

In the first phase, the two Chinese companies will employ 500 Mozambican workers. The minerals will be taken by road from Chibuto to the port of Maputo and then shipped to China for processing.

Source: all Africa

Comments (0)