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Australia’s untapped commodity
Halloysite-kaolin: Australia’s untapped commodity
Halloysite-kaolin is a difficult product to commercialise.
Before a company can commercialise halloysite-kaolin, it must understand the complex marketplace of the high-value commodity. One company is proving just that.
Halloysite-kaolin is an intriguing commodity growing in stature in Australia as mining companies and explorers come to understand its high value.
It’s considered the most researched clay mineral in the world, yet there are no active producers of the resource in Australia to this point.
However, there are a handful of emerging companies looking to change that, the most advanced of which is Andromeda Metals.
Andromeda is in the process of developing its Great White kaolin project on the Eyre Peninsula in South Australia and has a halloysite-kaolin specialist to call its managing director.
James Marsh’s family has been keenly involved in kaolin over the years, and after working in Cornwall in the United Kingdom, where kaolin was first mined in the 1700s, Marsh moved Down Under in 2002 and steadily began lifting the commodity’s profile.
Halloysite-kaolin is valuable because of its unique tubular microstructure, made up of hollow nanotubes that can only be observed and understood through the most powerful microscopes.
It’s an incredibly rare resource, but it has a lot of applications, something being proved by Andromeda.
In our conversation, Marsh demonstrated upward of seven different commercial avenues for the resource, and while Andromeda has yet to produce commercial amounts of halloysite-kaolin, it’s already putting in the corporate groundwork.
Andromeda has executed an agreement with Japanese porcelain manufacturer Plantan Yamada for its Great White CRM product, which will see the company purchase 5000 tonnes per annum of halloysite-kaolin at $700 per tonne for use in ceramics.
Marsh says his relationships in the field gave Andromeda an advantage in inking this deal.
“We chose ceramics first because we knew it had the halloysite which is where it’s highly valued and luckily with my background – I’ve been selling this stuff for 30-odd years – I’ve got a list of customers that I’ve been involved
with over the years,” he says.
“So that gave us a huge head start. Plus I knew exactly why these buyers would value it and how much it was worth for them, because they would never tell you that themselves.”
Marsh says much of halloysite-kaolin’s complexity comes down to selling the product, and the fastidious analysis and decision process buyers go through before signing off on any offtake deals.
“It’s a very hard material to market because there’s no index pricing for this stuff. In China alone, there’s over 10,000 users of this material and they’ve all got their own different formulations, their own processes, their own people who work different ways,” Marsh says.
“You also don’t talk to the buyers, you talk to the technical people and say, ‘here’s our product, this is its chemistry, this is its particle size, this is how it’s going to perform, this is how to use it in your application’ and convince them how they can use it.”
In its quarterly report for January to March 2021, Andromeda highlighted the meticulous analysis Plantan Yamada completed before signing off on the deal.
“Yamada analysed and tested a broad series of samples at laboratory and pilot scale over two years prior to running approximately 40 tonnes of material through its processing plant,” the report states.
“This was used to manufacture a large batch of high-quality porcelain items to give it a sufficiently high level of confidence to sign a legally binding agreement. Gaining customer approvals and offtake agreements for industrial minerals products such as halloysite-kaolin is an extremely intensive and lengthy process.
“It also involves a significant investment of resources by the target customers, so they must be fully convinced of a project’s viability and ability to supply very consistent product over a long period before they are willing to run sufficient tests for a binding agreement.”
Andromeda has also established an offtake partnership with Jiangsu Mineral Sources International Trading Co. for its Great White PRM product.
This will see the Chinese commodity trading house purchase 70,000 tonnes per annum of Andromeda’s kaolin product for more than $700 per tonne to be used in the coatings and polymers market. This is distinct from the halloysite-kaolin product to be sold to Plantan Yamada.
Andromeda also sees a potential to commercialise halloysite-kaolin in industries such as construction, agriculture, healthcare, cosmetics and nanotechnology.
With Great White’s potential, which Andromeda says is at 40 per cent halloysite purity and growing, the recent approval of the project’s mining lease, the established offtake partnerships and other commercial ventures in the works, Andromeda is well placed to elevate the site into production.
Marsh says Andromeda still has a few hoops to jump through before Great White construction can commence. Getting its Program for Environment Protection and Rehabilitation (PEPR) approved is an important step.
The PEPR “sets the regulatory requirements for the environmental management of impacts of a mining operation”. As part of this, Andromeda will need to outline its strategies to limit the environmental impacts of Great White across all stages of the mine’s life.
If all goes to plan, the PEPR will be signed off by June 2022, before Andromeda can then break ground at Great White.
The Great White definitive feasibility study (DFS) and bankable feasibility study (BFS) are also priorities for early 2022.
“The DFS will come out and that will be followed quickly by the BFS because we want to get as much debt funding as we can,” Marsh says.
“Then we’re looking very closely at starting initially with some direct shipping ore (DSO) to acquire some early cash flow.”
Marsh says the DSO avenue, which involves the sale of unprocessed ore, could be particularly fruitful as Andromeda develops its processing capacity at Great White.
“To build and commission a plant was looking at six months, but now it is looking more like nine months with the shipping delays around the world and delays in equipment, so we’re looking at factoring in the DSO business,” Marsh says.
“Because our material is worth double the average kaolin, the actual ore itself is worth double as well. So we could actually make some nice money out of sending the ore to the right people.”
Andromeda aims for first halloysite-kaolin production in mid-2022, which will solidify decades of hard work from the nascent mining company.
Other explorers in the Australian halloysite-kaolin space include Latin Resources, Oar Resources and Suvo Strategic Minerals, all of which are in less-advanced phases of development than Andromeda.
There’s also iTech Minerals, a company also focussed on developing battery and critical minerals such as graphite and rare earths. iTech has its Franklyn and Eyre
Halloysite-kaolin is a highvalue derivative of kaolin.
Andromeda aims for first halloysite-kaolin production in mid-2022.
Peninsula halloysite-kaolin projects in South Australia, the former of which is more developed given the company inherited exploration assets from Archer Materials in 2021.
“Both of them (Franklyn and Eyre Peninsula) are relatively early stage. We do have a head start at the Franklyn project … in that we’ve inherited about 10 years of historical exploration from Archer,” iTech managing director Michael Schwarz says.
Archer defined an exploration target of between 45 and 91 million tonnes of halloysite-kaolin at Franklyn prior to iTech taking over, and Schwarz says the predecessor found some of its Franklyn drill holes to be particularly halloysite-rich.
After iTech completes preliminary testing to identify further halloysite-kaolin prospects at Franklyn, the company will look to resume drilling at the project in 2022. iTech then plans to move its drill rig over to the Eyre Peninsula project where it has various exploration priorities, including the Ethiopia and Salt Creek prospects, both boasting the potential for rare earths.
In January, iTech received the final batch of analytical results from the resampling of historical drilling at Ethiopia, with beneficiated samples indicating the presence of rare earth elements (REEs) at the prospect. Ethiopia’s ETH-029 drill hole has shown particular potential.
“The rare earths in ETH-029 continue to display enrichment of neodymium and praseodymium, which are critical in the production of permanent magnets for electric vehicles and renewable energy. Significantly, this drill hole also shows a greater enrichment of high-value heavy rare earths,” the company states in an ASX announcement. iTech has sent samples from the Ethiopia and Salt Creek prospects to the Australian Nuclear Science and Technology Organisation (ANSTO), who will complete scoping test work and investigate the leachability of rare earths.
“With continued good grades and thick intervals of REEs in the kaolin-rich clay at Ethiopia, it is now important to determine how cost effectively the REEs can be recovered. The REE leaching test work being undertaken at ANSTO will be a good first step in determining the extent to which the REEs can be ionically leached,” Schwarz says.
While the early signs look strong, as the company continues to understand the capability of its assets, iTech still has a road ahead of it before the Franklyn and Eyre Peninsula projects can be commercialised.
As demonstrated by Andromeda, understanding the market and establishing the quality of the product is critical in making a run at this intricate commodity.
Once a company has certified that, it has every chance of capitalising on the expansive buyer base halloysite-kaolin can offer.
