Sovereign Metals (ASX: SVM) has inked an offtake MoU with Hascor International Group for the potential supply of 25,000 tonnes per annum of natural rutile from its Kasiya Project in Malawi, for use in the welding industry.
The non-binding deal would see distribution of the product to various processing plants across five continents over five years, with the potential for this amount to increase or decrease by mutual agreement.
Speaking on the MoU, Sovereign Metals Managing Director Dr Julian Stephens said “We are very excited to have signed this MoU with a major rutile supplier like Hascor about a future offtake agreement and to provide input on marketing for our premium rutile products from Kasiya. Hascor is a market leader in natural rutile product development and distribution for the welding industry across five continents. The offtake MoU with Hascor points to the quality and strategic nature of our world-class Kasiya Rutile Project.”
“The offtake MoU with Hascor points to the quality and strategic nature of our world-class Kasiya Rutile Project”
Sovereign notes that with price and demand for rutile remaining ‘very strong’, and with the global deficit in supply continuing to widen, this initial MoU is the next step in its product marketing strategy following an initial Scoping Study which had confirmed Kasiya as a ‘globally significant’ natural rutile project.
Over recent years, major natural rutile producers have noted a ‘very strong demand’ from the welding market, causing bagged rutile sales into welding and various other non-pigment industries to achieve stronger pricing with ‘significant’ premiums to bulk rutile.
Independent consulting and publishing company TZ Minerals International has said that it expects bagged rutile sales to achieve USD$500-600 per tonne price premiums over the bulk market in 2022, with these sales expected to power pricing growth due to limited alternatives to rutile feedstock in the welding sector.
Images: Sovereign Metals Limited
