mzi secures offtake for keysbrook, page-43

On the one hand its 2 years away and on the other Zircon demand in the short term weak? Not adding up.

Keysbrook will be in production next year (IF funding secured) not 2 years. On production the breakdown will be

L70 - 33%
L88 - 48%
Zircon - 19%

All the big players are raising prices, not because demand is one the rise but to stop further price falls. This will take sometime but they will succeed. Most look to 2nd of '13 but more likely 1st half '14. This is a familiar pattern.

The price of Zircon may lag even further but it will be 19% of the end product. More importantly 81% will be high grade TiO2.

This is what Iluka put out last month regarding their outlook

High Grade TiO2 – 2013 Outlook
• Pigment plant utilisation continues at historically low rates – 65% to 75%
• Indications pigment inventory draw down is now advanced
• Pigment industry commentary suggests return to more normal outputs from 2H13
• US and European painting season a key influence
• Iluka high grade sales likely to remain sluggish in 1H relative to potential 2H recovery
• Feedstock pricing in 2013 influenced by end of legacy contracts
• Recent industry production curtailments an expected positive for market dynamics