Iluka spinoff to boost global market share amid 'baked-in' supply decline

Declining global supply of natural rutile and a lack of recycling opportunities are set to increase Sierra Rutile Holdings Ltd.' 25% share of the world's titanium feedstock market, Finance Director Martin Alciaturi said Sept. 8 at the Africa Down Under conference in Perth, Australia.

The Sierra Leone mineral sands producer spun off from Iluka Resources Ltd. in 2022.

Australia and many other nations list titanium as a critical mineral, and Alciaturi said the market for titanium feedstocks is currently worth over $4 billion.

Natural rutile is the preferred raw ingredient for the "cleaner, greener chloride pigment production process," Alciaturi said. Titanium is used in aerospace, defense, construction, shipbuilding, medical devices and sporting goods, where there are also no substitutes, he said.

The company's Sierra Rutile project in Sierra Leone is the world's largest natural rutile producer, according to the company, and the sixth-largest rutile deposit, according to S&P Global Market Intelligence data. It also produces ilmenite and zircon.

In March, Sierra Rutile updated its ore reserves at Area 1 within its namesake project and at the nearby high-grade brownfields growth project, Sembehun, which is Sierra Leone's largest-ever foreign direct investment, according to Alciaturi.

Sembehun's mine life is currently estimated at 13 years, but the 508 million metric ton resource suggests that its life will "most likely double in due course," the director said. The Area 1 reserves have about three years of operation left, and built-up tailings should add another year of production.

Unlike other critical minerals, titanium appears to have few options for recycling, "given that something in the order of 80% or more of it is used in pigment," which means demand will continue growing for some time, Alciaturi said.

While "the best cure for high prices is high prices" in many commodity markets, "the strange thing about rutile" is that the global supply decline out to at least 2025 is "pretty much baked in. There is essentially almost nothing that will stop that."

"Right now we're producing pretty much 25% of global [rutile] supply, and if we can keep going and the rest of the market struggles, then we'll quite rapidly become a bigger proportion of that," Alciaturi said.

Sierra Rutile will not need to develop new markets for Sembehun as it is a brownfields development. "The rest of the market is retreating at a sufficient pace that even if we grow our production levels, we won't be able to sustain global production," Alciaturi said.

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