Australian producer Sheffield Resources and Chinese producer Yansteel will invest A$6.5mn ($4.2mn) into their Kimberley Mineral Sands (KMS) joint venture to provide working capital to the Thunderbird mine, because of weakening zircon demand and loan obligations.
The KMS venture must make loan repayments to global creditor Orion and Australian state-owned lender the Northern Australia Infrastructure Facility (NAIF) by 31 December, Sheffield Resources said on 19 November.
Sheffield Resources and Yansteel are in talks with the venture's lenders over payment deferrals or credit restructures. But there is no guarantee that the discussions will be successful, the Australian producer said. Sheffield Resources has not committed to providing additional working capital support to the joint venture.
The NAIF and Orion opened A$160mn and $110mn loan facilities, respectively, with the joint venture in 2022. Both creditors' debts are secured against Thunderbird's assets and guaranteed by KMS' owners, Sheffield Resources said at the time.
Orion's debt package also includes a 1.6pc royalty deal on sales using up to 8.2mn t/yr of mined ore.
KMS mined 10.4mn t/yr of ore and produced 740,666t of heavy mineral concentrate at Thunderbird over the July 2024-June 2025 financial year. The joint venture started processing ore in late 2023 and shipped its first load of zircon in January 2024. It plans to ramp up production at Thunderbird to 220,000–240,000 t/yr of zircon concentrate and 900,000–950,000 t/yr of ilmenite concentrate by July-September 2027.
Yansteel and Sheffield's capital injection comes just over a month after the Chinese producer agreed to buy all unsold zircon concentrate from Thunderbird at a fixed price to support KMS. Yansteel also has a 100pc ilmenite concentrate offtake deal with the venture.
KMS is not the only heavy mineral producer facing challenges. Large zircon producers across the US, Australia, and South Africa cut mineral export prices to China in late October, because of weak demand.
Australian producer Iluka Resources will also pause its Cataby mine, which produces zircon, rutile and synthetic rutile, for one year from 1 December. Its zircon concentrate sales fell by 45pc on the year in July-September, from 24,000t to 13,000t.
