Exxaro shuns Corridor Sands

[miningmx.com] — EXXARO Resources has said it is not interested in the Corridor Sands heavy mineral sands deposit in Mozambique, which may be up for grabs.

The Corridor Sands project belongs to BHP Billiton, but news agency Bloomberg reported on Wednesday that the Mozambican government was planning to take it back on the grounds that BHP Billiton had “abandoned it’.

BHP Billiton CEO Marius Kloppers commented, “we have an exploration permit for Corridor Sands that expires in October 2009. We have applied for a renewal of that permit and we hope we will be successful but we have not had any notification yet from the Mozambique government. I cannot comment further.”

Answering a question at Thursday’s presentation of Exxaro’s interim results, financial director Wim de Klerk said that he was “not surprised’ that BHP Billiton had decided not to continue the development of Corridor Sands.

De Klerk said: “We were offered ownership of Corridor Sands some time ago. We turned it down because we decided the material was not suitable for our furnaces, as it contained a high level of manganese and also had a very low zircon content.’

Exxaro’s KZN Sands titanium smelter near Empangeni in KwaZulu-Natal now faces an uncertain future after Exxaro said it considered putting the two projects which would extend its economic life on hold.

These were the Fairbreeze C extension project and the Port Durnford project, which were meant to supply the KZN Sands furnaces for more than 20 years. Both projects are under review because of poor titanium market conditions.

De Klerk said current mine reserves would support the KZN furnaces only until 2011/2012.

“We have to take a decision next year about developing a replacement mine. We are taking a very cautious outlook on what we do next, and various other options are being looked at.’

Corridor Sands was found and initially developed by the former Southern Mining – an exploration company run by mining entrepreneur Rob Still.

Southern Mining brought in the former Western Mining Corporation (WMC) as a partner and WMC bought full control of Corridor Sands in 2003.

WMC was looking at building a plant that would initially produce 375,000 tonnes per year of titanium slag rising to 1 million t/year, which would put it on a par with Richards Bay Minerals.

WMC was then taken over by BHP Billiton in 2005.