<article><p class="lead">Australia-based zircon producer PYX Resources expects demand for zircon and titanium products to grow in 2023, providing opportunities to further increase its production capacity and market share.</p><p>PYX ramped up its output in 2022 in response to demand from applications including nuclear power, aerospace and catalytic converters. </p><p>PYX's revenue increased by 83pc to $22.7mn in 2022 from $12.4mn in 2021, the company reported yesterday. Its zircon revenue climbed by 81pc year on year, and it made its first sales of titanium dioxide minerals ilmenite and rutile as by-products of its zircon output.</p><p>PYX, which mines high-grade zircon in Indonesia, reported a 25pc increase in its zircon production over 2021 to 9,100t from 7,200t. The company sold all of that production, representing a 33pc increase over its 2021 zircon sales of 6,900t.</p><p>PYX's average annual zircon price rose by 36pc to $2,457/t last year from $1,811/t in 2021, and was up by 85pc from 2020. That reflects how the market has retreated from the 12-year highs reached in early 2022 but remains above 2021 levels. PYX had raised its premium zircon price by $795/t to $3,100/t in March 2022, a 34pc increase and its fifth consecutive rise since January 2021 for a gain of 135pc.</p><p>Zircon prices moved lower in the second half of last year, on a drop in demand from ceramics manufacturers in China and Europe, but the market has been rebounding so far this year. The <i>Argus</i> assessment for 65pc grade Hainan zircon sand has moved up to a 13,700-14,000 yuan/t range on an ex-works China basis, from Yn12,100-12,400/t in mid-December.</p><p>Over the medium term, PYX expects strong global demand for zircon owing to increased use in foundries and refractories, new nuclear power plant construction in Asia-Pacific, and accelerating use in surface coatings to drive demand.</p><p>The global zirconium market is projected to expand at a compound annual growth rate (CAGR) of 5pc in terms of volume from 2022 to 2027.</p><p>The nuclear industry in China is due to account for a large proportion of that growth, as there are 11 nuclear reactors under construction and another 43 planned. India has seven units under construction and 21 reactors expected to be brought on line by 2031.</p><p>China is expected to see the fastest CAGR to 2027 and account for around 50pc of the total revenue. </p><p>PYX expects the titanium market to grow at a rate of 6.4pc from 2021 to 2028, driving demand for its titanium dioxide by-product. PYX started producing rutile in January 2022 and ilmenite in June 2022 to capitalise on the expected demand growth.</p><p>PYX produced 7,500t of titanium dioxide minerals last year and sold 3,000t. The rest of the material is held in its 7,300t of finished goods inventories, as the company is waiting to receive an export licence to start selling it internationally.</p><p>Increased use of titanium dioxide in pigments for paints and coatings formulation is a key market driver, as well as growing demand from the aerospace, aviation, shipping, offshore mining and petrochemicals industries. Titanium provides durability, strength and chemical resistance for a range of applications. </p><p>PYX said in December that it received a further investment of $2.5mn from Australia-based L1 Capital Global Opportunities Master Fund to accelerate its plans to ramp up production at its Mandiri deposit and start planning operations at its Tisma deposit in Indonesia. L1 invested $4.5mn in March last year.</p><p>PYX received a 10-year exploration and mining licence renewal for Tisma last month. The deposit contains 4.5mn t of inferred Zircon resources. The Tisma and Mandiri deposits combined have a total of 10.5mn t of zircon contained within 263.5mn t of heavy mineral sands. </p><p>PYX in November drew down the first $400,000 from a $20mn capital investment from US-based GEM Global Yield announced in October.</p><p>PYX started warehouse operations at Port Klang in Malaysia in November. Port Klang is the second-largest port in southeast Asia and the warehouse location will reduce PYX's shipping times by several weeks, cutting costs for consumers in India, Europe and the Americas compared with shipping directly from Banjarmasin in Indonesia. </p><p>PYX aims to provide a buffer to limit the impact of seasonal storms and other supply chain issues that have hampered global supply chains, increasing the predictability of shipments and onward arrival times.</p><p class="bylines">By Nicole Willing</p></article>
