1219721, 351 PM Industal minerals Andalusite sees demand fire up in refractories By Antonio Tors! Publisned: Monday, 28 April 2014 ‘As conventional raw minerals for refractories are becoming scarcer and more expensive, Antonio Tortisi, Reporter, discovers how andalusite might meet more demand in refractory markets. Andalusite is used for monolithic linings in the steel industry, particularly in blast and electric furnaces. Its also used in the glass industry and in cement kilns. Andalusite-based refractories are mainly produced in the regions which host the raw mineral resources. Within this market andalusite has replaced other refractory raw materials such as chamotte, bauxite, and fused alumina, The market consists of only a few producers worldwide. Over the past 25 years production of andalusite and its products has ‘mainly been focused in South Africa and Europe, with Imerys SA controlling 70% of the supply Andalusite, kyanite and sillimanite are aluminosilicate minerals, with high AI203 content varying from 63% (high-grade) to below 40% (low-grade), and silica content of about 37%. The minerals have the same chemical composition, but differ in their structure and physical properties (see table), Under heating, all three minerals transform to make mullite, an ideal refractory material, which contains up to 72% Al203 and melting at 1,850;C. Mulite is made of needle-like crystals, which gives the material high load-bearing capacity at elevated temperatures. Andalusite converts to mullite when heated at temperatures between 1,300)C and 1,550;C. Itis the best source of mullite as its Unique microstructure traps the liquid silica released in the process called mulitisation, Dirk Auge, from German andalusite trading company Cofermin Rohstoffe GmbH, told IM that sillimanite and mullite can be used as substitutes for certain applications, but the ceramic companies do nat publish the exact formulations for this use. “itis a matter of availabilly, physical properties and price. Sillmanite is mainly available in small size fractions, up to 1 mm, while andalusite generally up to 4 mm; the coarse grits (3-8 mm) sometimes needed by the refractory makers are rare,” he said. Carlos de Ferrari, president of Andalucita SA, said that andalusite has several advantages over kyanite, sillimanite and other high alumina and fireclay materials, as it can be used directly in the manufacture of refractory products, without pre-calcination, a process which is needed for kyanite and silimanite. “Since andalusite needs no calcining, it offers significant economies in that it saves energy, an advantage that is of importance in the light of increasing energy costs,” De Ferrari said in the 2013 UNITECR proceedings. ‘Andalusite-based refractory products show good corrasion resistance towards carbon monoxide, alkalis, acidic slag and melted ‘metals and is a relatively inert raw material, with low thermal conductivity and high creep resistance. For this reason, andalusite competes with other calcined kaolintic/bauxitic high-AI203 materials. ‘According to a comparative study in 2013, conducted by South African producer Vereeniging Refractories Ltd, in collaboration with the Souther African Institute of Mining and Metallurgy, andalusite has better performance compared with bauxite for applications. as refractories; with higher chemical purity, higher creep resistance, resistance to chemical attack and thermal shock resistance. hitpshwwucindmn.con/Artele/33947 17/Andalusite-sees-demanc-fre-up-i-teractris himt2Pr Mu1219721, 351 PM Industial Minerals SUPPLY SECURITY In March this year, adverse weather conditions in South Alrica affected operations in Thabazimbi and Limpopo regions, which lie north-west of Johannesburg. Producers operating in this region suffered flooding to pits and damage to infrastructure, causing a great deal of disruption in the supply chain. “The severe rains in February and March have disrupted our production by about four weeks,” Colin Bain, financial director of Andalusite Resources Ltd, told IM. ‘Auge added: “We have recently experienced some lower production outputs in the Limpopo province of South Arica because of heavy rain far above average,” he told IM. In North America, andalusite consumption has been relatively small, with the refractory industry relying on bauxite-based and kyanite-based products, The recent discovery of large andalusite resources in Peru, and the possibilty of new producers entering the supply chain, could altract Latin America and North America as potential new markets. South Aftican producer Andalusite Resources Ltd, which extracts the mineral from its Maroeloesfontein mine in Thabazimbi, Limpopo province, said that more than a quarter of its annual production goes to the domestic market, while another 30-40% goes to Europe and rest to Japan. “Japan is a very sophisticated market, They were among the first to recognise the benefits of using andalusite and have proven very loyal,” said the company. ‘Andalusite Resources explained that the refractory industry is extremely cautious and conservative in its choice of refractory products, and once a product is chosen, there is a strong resistance to change. ‘According to the US Geological Survey (USGS), the total world production of andalusite, kyanite and silimanite was about 440,000 tonnes in 2013, up by 7.8% compared with 2012. The Department of Mineral Resources and Statistics in South Africa meanwhile said that total production of andalusite in 2013 was at 220,000 tonnes in 2013, up 10% from 2012. Imerys’ subsidiary, Denain-Anzin Mineraux Refractarie Ceramique (Damrec), is the world’s largest supplier of andalusite and produced 70% of the total output from South Africa. Damrec operates in the region with two subsidiaries, Rhino Minerals Ltd, which controls the Annesley, Havercroft and Rhino mines in the Limpopo province, and South African Mineral Resource Committee Ltd (Samrec), which operates Krugerpost mine in Mpumalanga province, Andalusite Resources meanwhile produced 72,000 tpa in 2012, with the company planning to expand its production to 90,000 tpa by the end of 2014. The company’s main markets are China, Europe, India and South Aftica. According to the Minerals Bureau of South Africa, reserves of andalusite and silimanite are 94.9m tonnes. hitpshwwucindmn.con/Arbele/33547 17/Andalusite-sees-lemanc-fre-up-i-telractris him2Pr1219/21, 951 PM Industal minerals Refractor lining which insulates the steel shell of arotary kiln France In France, Damrec mines andalusite near Glomel, Brittany, with a production of about 65,000 tonnes andalusite in 2013, flat year- on-year (y-0-¥), which accounts for 8% of the US imports, according to the USGS. ‘The Minerals Bureau of South Africa estimates France's andalusite reserves to be at least 2.4m tonnes. China China-based Imerys’ subsidiary Yilong Andalusite Mineral Co. mines andalusite in the Xinjiang region, north-west China, with a production capacity of 40,000 pa, according to the USGS. China imported 17,700 tonnes of andalusite,kyanite and silimanite in the ist haf of 2013, with imports reaching 34,000 tonnes at the end of November 2013, according to Refractory Window publication. Peru Imerys also owns andalusite resources in Peru, though i s stil developing projects there ‘Andalucita SA mines andalusite from unconsolidated sand and gravels in the Tablazo Mancora flood plain, in the north-west of Peru In 2013, Andalucita increased its production capacity to 48,000 tpa from 25,000 tpa in 2012. ‘Andalucita’s mineral is high purity, with grades varying from 59% to 60% alumina (AI203) and a maximum of 0.85% iron oxide. ASX:lsted junior company Latin Resources Ltd has been developing a large deposit of andalusite at its Guadalupito project, 25km from the port city of Chimbote, Peru, which it acquired in 2011 AJORC compliant resource estimate indicates Sbn tonnes mineralised sediments, of which 22% to 25% consist of andalusite, along with other minerals including ilmenite, rutile and zircon. ‘The company is planning to produce an inital 159,000 tpa andalusite and estimated a mine life of 56 years, Latin Resources said that andalusite concentrates, produced from heavy liquid separation, showed the potential for a product containing 58% Al203, which could be further increased via electrostatic separation processes. Andrew Bristow, general manager of the Guadalupito project at Latin Resources, told IM that the company aims to enter production in late 2016, “Latin is already working with minerals distributors in the US, in anticipation of supplying andalusite products to the country,” Bristow said. He added that, given the size and the unique potential for very significant levels of andalusite, the company will market the raw ‘mineral not only in the US and Latin America, but also worldwide, hitpshwwucindmi.convArbcle/33947 17/Andalusite-cees-lemanc-re-up-in-reractories.htmI?Print=kue se1219721, 351 PM Industal minerals “The other products that we aim to recover simultaneously allow for production costs to be shared amongst each product, resulting in very low unit cost of production for a premium andalusite product,” Bristow told IM. “Low production costs should also provide additional scope to offset shipping costs which will allow Latin to supply andalusite competitivaly anywhere in the world," he added, us Production of andalusite, kyanite and sillimanite in the US amounted to 95,000 tonnes in 2013, down from 99,000 tonnes the previous year. Piedmont Minerals Co., a subsidiary of US-based refractory producer, Resco Products Inc., mines andalusite, together with Pyrophilite and sericite, in Hillsborough, North Carolina, mainly for the domestic ceramics and refractory market. Kyanite Mining Corp. has mined kyanite deposits in central Virginia since 1945. According to the Virginia Department of Mines Minerals and Energy, the company produced about 121,500 tonnes kyanite in 2013, up 12% y-0-y. Kyanite contains between 55% and 60% AI203, and reserves at Kyanite Mining’s East Ridge and Willis Mountain mines are sufficient for 80 to 75 years at the current production rate, ‘An estimated 30% to 35% kyanite produced by the company was calcined to produce mullite for the refractory market. In 2012, processing capacity at its Gieseke plant was more than 135,000 tonnes kyanite concentrate, of which 45,000 tonnes calcined to form refractory-grade mullite. In the same year, C-E Minerals, part of French mining company Imerys SA, produced 40,000 tonnes synthetic mullite from calcined bauxitic kaolin in Georgia, according to the USGS. ‘The agency reported that andalusite imports to US amounted to 6,000 tonnes in 2013, from South Africa (80%), France (8%) and Peru (7%). 200.000: 345 | 340 4g taco: 5 @ x20 $0,000 5 310 o°—go0s 2003200 z0n 20205575 Sourés! US Geolegieal Survey (2014 Canada British Columbia, Canada, also hosts more than 45 kyanite and 23 andalusite occurrences according the British Columbia Ministry of Energy and Mines (BCMEM), Kyanite deposits are at the Dudevoir Passage and Trail Bay, in the Tsimpsean Peninsula and Hawkesbury Island, while andalu resources are in the areas of the Omineca Coast and Insular belt and in the Bridge River area, 180km north of Vancouver. Andalusite ores vary from 7% to 20% andalusite content, corresponding to a production capacity of between 25,000 and 65,000 tpa, the BOMEM said, India India is host to kyanite,silimanite and andalusite resources. The India Bureau of Mine (IBM) reported total resources of kyanite amounting to 103.2m tonnes in 2010, of which 1.6m tonnes reserves and 101.7m tonnes remaining resources are mainly concentrated in the states of Andhra Pradesh (78%), Kamataka (13%) and Jharkhand (6%). hitpshwwucindmi.convArbcle/33947 17/Andalusite-cees-lemanc-re-up-in-reractories.htmI?Print=kue1219721, 351 PM Industal minerals Silimanite resources amount to about 67m tonnes in 2010, with 4.1m tonnes reserves and 62.9m tonnes remaining resources being mainly located in Tamil Nadu (27%), Odisha (20%), Uttar Pradesh (17%), Andhra Pradesh (14%) and Kerala (11%). ‘Andalusite inferred resources amounted to 18.5m tonnes in 2010, located in Uttar Pradesh and Jharkhand, according to IBM. The IBM indicated production of kyanite in 2012 decreasing by 32%, to about 4,000 tonnes, due to the closure of mines, forest problems and lack of demand. The main producers are Jharkhand State Mineral Development Corp., accounting for 99% of production, and Maharashtra State Mining Corp. Kyanite consumption in the domestic market remained flat at 3,900 tonnes in 2012, entirely from the refractory industry, while imports decreased from 500 tonnes to 260 tonnes in 2012. Production of silimanite in India amounted to 58,000 tonnes in 2012, an increase of 19% y-o-y, due to rising demand, according to the IBM Three main producers, including Indian Rare Earths Ltd, Trimex Sands Private Ltd and Maharashtra State Mining Corp., contributed to the entire production. Silimanite consumption in India increased by 2% in 2012, up to 12,700 tonnes, with the refractory industry accounting for the 94% ofits consumption, In 2012, India saw sillimanite exports surge up to 11,900 tonnes, mainly to China, Bangladesh, Oman and Japan, compared with 2,200 tonnes exported in the previous year. India stopped andalusite production in 1988 relying on imports instead. Imports of the mineral grew by 11% in 2012, to 6,100 tonnes, mainly from South Africa. Elsewhere ‘Andalusite resources have been also reported in Kazakhstan and recently in Terengganu, Malaysia, while sillimanite and kyanite mineralisation is present in South Australia and Brazil ‘Australia imported about 10,900 tonnes of andalusite, kyanite and silimanite in 2013, up 44% y-o-y, according to Australia's Bureau of Resources and Energy Economics. Kyanite resources are present in Brazil in the state of Mina Gerais, where refractory producer Togni S/A Materiais Refratarios has a production capacity varying between 120,000 and 160,000 tpa, Junior Picobello Andalucita SL has been recently developing an andalusite project in Galicia, Spain, near the Fragas do Eume National Park. The company plans to extract 65,000 tpa of raw mineral, of which 50,000 tpa refractory grade andalusite during a 46-year mine life. However, the company is still waiting for environmental permits owing to its proximity to an environmentally protected area. MARKET DEMAND. hitpshwwucindmn.con/Arbele/33547 17/Andalusite-sees-lemanc-fre-up-i-telractris him2Pr1219721, 351 PM Industal minerals Refractories demand is expected to rebound on the back of growth in the iron and steel markets. This, in turn, would lead to a resurgence in demand for andalusite. This outlook might push up andalusite prices in the near future, with new suppliers entering the market, especially from South ‘America. Andalusite-like minerals, such as silimanite and kyanite, are potential competitors in accessing the refractory market in the near term, as alternatives to andalusite, However, as IM leamed, andalusite has some cost advantages as it uses less energy, Refractory products account for the 90% of andalusite, kyanite and silimanite consumption worldwide. Cofermin's Auge told IM that the global market of andalusite in 2013 was in the range of between 250,000 and 280,000 tonnes. “The main applications are refractories for the steel, cement industry as well as incinerators,” Auge said. “Compared to 2012 and 2011 we believe that the total size of the market has not drastically changed. It predominantly shifted in the territories, and overall grew only slighty,” Auge added. Cofermin reported a reduction in the market's supply capacity due to mine closures and ageing deposits. The company added that, this reduction, together with a slight rise in demand, especially from Poland and Easter Europe, has pushed the market out of a period of over-supply, moving it towards equilibrium again. ‘Anasat ‘Shimane hema formula S10, ‘ALSO, i == HALO, GH A.C RAIS, te cates Seensio ——-36eKS10, Sens, ‘Seece Gravity = A20/ USES SEE 328 Harcness 75 “Temperature of multsation USOC LOD" TIOOC= 490°C SSO KESOC Volume change during calcination Very slight ncrease Incense Slight ncoase ‘Density ater cichnation at a Sey se 305 3 Source: industrial Minerals and Rocks 2006 Steel The world steel industry is back to a positive trend since its downturn due to the glabal economic crisis in 2009. Data from the World Steel Association (worldsteel) show a steady increase in steel production from 1.43bn tonnes in 2010 to 1.58bn tonnes in 2013, up 2.4% y-o-y. Despite optimism for a global pick up in steel production during 2014, figures from worldsteel showed a 0.4% shrinkage y-o-y in steel production for January 2074, to around 130m tonnes, China, which is the world's largest refractory producer, saw crude steel production fall 3.2% y-ory together with the US, which saw a slight reduction by 0.5% compared with the same period in 2013. Contrary to this trend, the EU and Japan recorded positive outcomes, with steel production growing by 7.3% and 6.1%, respectively. The overall slower growth of the steel industry affected the demand for refractories. While a number of new producers are emerging outside China, in particular in Guyana, Russia, Brazil and India, the end-sectors ‘might also move to allemnative refractory products, in particular higher performance refractories such as andalusite, kyanite, silimanite and sintered mullite, according to Roskill PRICE TRENDS. Prices for andalusite imported from South Africa increased by 2% to 5% in 2012, to $311-370/tonne (FOB, 57% to 58% AI203) and $463-562/tonne (FOB, European port, 55% to 59% Al203). The average price for imported andalusite from South Africa in US ‘was $350/tonne in 2013, according to the USGS. The agency said that the increase in prices was the result of increased demand from the refractory industry, parlly because companies started to substitute bauxite with andalusite in their refractory products, and equally because Imerys increased prices on its andalusite products. hitpshwwucindmn.con/Arbele/33547 17/Andalusite-sees-lemanc-fre-up-i-telractris him2Pr1219721, 351 PM Industal minerals "We see the consistent increase in price and demand as a positive for andalusite producers,” Bristow, general manager at Latin Resources, told IM. ‘Higher specification andalusite, with a high percentage of AI203 and low impurities, attracts premium prices," he added. Data from the Department of Mineral Resources and Statistics of South Africa show that the andalusite price in South Africa increased steadily from $130.5itonne in 2006 to $217.6/tonne in 2012, Prices were estimated from the share between total sales and the value of the South African rand, Calculations on data from the IBM show an increase in prices of andalusite imported to India, rising from $301/tonne in 2011 to $336)tonne in 2012 for andalusite from South Africa, from $326.6/tonne to $470 tonne for andalusite from France and from $358 6ytonne to $384/tonne for andalusite from Peru. Prices were estimated from the ratio between imported quantities and value in Indian rupees. Estimates from China's imports data of andalusite, kyanite and sillimanite from January to November 2013, confirm prices of these minerals to be around $333.4/tonne. Average prices for imported andalusite, kyanite and silimanite from the Ministry of Environment of Czech Republic, were about $540/tonne, while average prices for imported mullite were up to $983/tonne in 2012, “The demand for high-grade materials, as well as market availability and pricing policy of suppliers, are reasons for the rise in prices,” Frank Richter from Mineralmahlwerk Westerwald Hom GmbH & Co. and Harald Seifert from the Technische Universitat Bergakademie in Freiberg told Refractory Worldforum in 2013. "As several raw materials for refractories are scarce and the production of synthetic raw materials has high energy costs, prices have constantly increased in the last years,” Richter and Seifert said. Prices of South Africa's andalusite have also increased, but to a less extent, from §180-200/tonne in 2000 to $297-346itonne in 2011 "South African producers battle with ever rising costs for labour and energy,” Auge told IM, He added that, in the last two years, the devaluation of the South African rand against the euro and US dollar helped compensate the cost increase, In case the rand will get stronger again we don't believe they [andalusite producers] have much choice other than passing these increases on to the market place,” Auge said Prices of kyanite (FOB) in the US increased from $149-169/tonne in 2005 to $247-353)tonne (raw, 54%-60% alumina) in 2012, according to the USGS. Estimates from the IBM indicate prices of $359/tonne for imported kyanite to India in 2011, while prices for silimanite in India amounted to $134/tonne in 2011 and $144-146/tonne in 2012. MARKET OUTLOOK Figures from worldsteel show that apparent consumption of steel in the US will Increase by 2,9% in 2014, following an 8.4% increase in 2011 to 2012, mostly from the automotive and energy sector. Global stee! consumption is also expected to grow by 3.2% in 2014, with an increase of 2.5% in China. Growth is also expected within the China's cement industry, according to the USGS, an industry which could become a potential cend-market for andalusite, kyanite and sillimanite minerals as alternatives to bauxite-based refractory products, ‘Andalusite could also enter the Chinese market, in light of increasing domestic demand from the refractories industry. "According to our estimates, China's demand cannot be supplied from local andalusite producers (mainly located in Xinjiang Province) by 100% and the deficit will have to be imported andalusite," Auge told IM. ‘A sharp shift to andalusite-based refractories in the iron and steel industry will depend on the ability of refractories to use alternatives to bauxite-based products, the quantity and price of bauxite available for mullite production and the quantity and price of andalusite available for this market. China’s quotas on bauxite exports and its rising prices could help andalusite permeate the refractory market worldwide, “We foresee a more equitable relation between demand and supply, which is already becoming visible in the stabilisation of price levels, in conjunction with slight upsurges in some territories,” Auge told IM. He added that in the mid-term the major players in the market will have enough capacity to serve the rising demand. ‘Although new bauxite producers are also entering the market, andalusite and mullite refractory products could become more competitive owing to lower energy consumption and greenhouse gas emissions. hitpshwwucindmn.con/Arbele/33547 17/Andalusite-sees-lemanc-fre-up-i-telractris him2Pr1219721, 351 PM Industal minerals ‘A potential for market expansion of andalusite-based refractories is offered by the North American market. Germany, with an average steel production of 45m tpa, consumed about 40,000 tpa of andalusite in 2013. On the other hand the US stee! market, with an average outcome of 80m tpa crude steel, consumed only 4,000 tpa andalusite in the same year. TAK Industrial Mineral Consultancy forecast that world refractory production will rise to 46m tonnes by 2017, on the back of an average annual growth rate of 3.5% in global crude steel production. However, the rise in refractories demand willbe likely to be slightly offset by an overall reduction in consumption of refractories per tonne of steel produced, with China expected to reduce its specific consumption of 23 kg per tonne, owing to the use af more advanced steelmaking practices. Additionally, new market opportunities could come from innovative applications such as the use of multe as a catalyst, replacing platinum, in diesel engines to reduce nitric oxide and nitrogen dioxide pollutants, This new application was studied by scientists from the University of Texas in 2012, with the start-up company Nanostellar having commenced commercialsation of the product. hitpshwwucindmn.con/Arbele/33547 17/Andalusite-sees-lemanc-fre-up-i-telractris him2Pr