US looks to revive domestic titanium supply

The US is looking to re-establish its titanium supply chain after the last domestic titanium sponge plant closed in August and increased the country's reliance on imports of the critical metal.

Australian mining explorer Tao Commodities has acquired an option on a titanium and zircon project in Tennessee. The resource is 15km from one of the world's largest titanium-consuming pigment plants, owned by US-based Chemours.

Chemours has also opened a new facility in Georgia after it acquired an $86mn mineral sands mining project last year. The plant will produce titanium dioxide (TiO2) piment, as well as zircon to be used in precision casting.

US relies on imports in tightening market

Titanium dioxide demand for paints and pigments in the US has held up this year more than in Europe, Latin America and Asia Pacific, driven by demand for coatings and DIY, Chemours said in its second-quarter results.

China is the largest consumer of TiO2, and excess output that was previously exported from China is now being consumed in the country, Chemours said.

Covid-19 related shutdowns of ilmenite production in China and India in the first half of the year further exacerbated a global ilmenite shortage, while large pigment producers maintained production, African mineral sands producer Base Resources said in its quarterly report.

The decline in global pigment demand was less than anticipated for most of the quarter. UK-based producer Venator was able to increase prices in March and April and said average pricing was stable in the second quarter compared with the first quarter and year on year.

The US imports almost all of the titanium it consumes after the closure of Australian mineral sands producer Iluka's operation in Virginia in 2016, US-based metal producer ATI's titanium sponge plant in Utah in 2016 and US-based titanium sponge producer Timet's plant in Nevada in August this year.

Timet said last year that the Nevada plant would no longer be viable without intervention from the government to introduce tariffs on imports from Japan under section 232 of the Trade Expansion Act.

The Trump administration declined to introduce tariffs, instead directing the US Defence and Commerce departments to negotiate measures with Japan to secure access to titanium sponge. With the closure of the Nevada plant, Timet revised its long-term purchase agreement with Japanese producer Toho Titanium to increase its imports of sponge.

Projects anticipate government support for critical supply

While TiO2 demand has held up, sales so far this year have been lower than in 2019.

Demand for sponge is likely to remain under pressure as the aerospace sector faces a difficult environment following the Covid-19 outbreak.

Airline orders for new planes have slumped and the world's largest titanium producer — Russia's VSMPO-AVISMA — expects its orders to remain under pressure until the end of 2021.

But Tao Commodities is looking ahead to government stimulus spending for infrastructure and defence in the wake of the pandemic to boost titanium demand internationally. This will emphasise the need to re-establish a US production base, the company said.

Titanium is on the US government's list of 35 critical minerals owing to its use in aerospace and defence. Titanium sponge is difficult to store for long periods as its quality degrades, making stockpiling unsuitable for military and aerospace applications.

The US Geological Survey and the Association of American State Geologists have awarded $100,000 in funding for critical minerals projects in Florida, including grants to the Florida Geological Survey for surveys focusing on the potential for producing rare earths and titanium.

Canadian mining exploration company Temas Resources has acquired an iron, titanium and vanadium resource in Quebec. It cited the Canada-US Joint Action Plan on Critical Minerals Collaboration to secure supply chains as the reason for its investment, anticipating demand from the US for its output. The US strategy includes accessing critical minerals through investment and trade with allies including Canada.

By Nicole Willing