When it comes to the kaolin industry, Australia’s distance from the traditional markets in America, China and Europe put it at a disadvantage. But Andromeda Metals, through the quality of its Great White project, is working hard to break onto the global kaolin stage.
Kaolin is a soft white clay. Its stark colour and composition means it can be used in everything from paint to ceramics.
Andromeda Metals is developing the Great White halloysite-kaolin project in South Australia, about 635km west of Adelaide on the Eyre Peninsula.
In late August, Andromeda released an updated definitive feasibility study (DFS) for Great White, which increased its net present value by 65 per cent to over $1 billion, and its average annual earnings before interest tax depreciation and amortisation by 59 per cent to $130 million.
Andromeda Metals chief executive officer Bob Katsiouleris told Australian Resources and Investment that the DFS highlighted the high quality of Great White’s kaolin.
“This DFS has targeted very high-end uses of kaolin rather than bulk commodity markets, so we can charge premium prices,” he said.
“We’re looking at selling smaller volumes but across several high-end markets like tableware, porcelain, ceramic tiles, slabs and glazes.
“This will allow us to offset the cost of getting it to those traditional overseas markets.”
What sets Great White apart from other projects is that contains a very rare form of kaolin known as halloysite-kaolin. Halloysite-kaolin particles are shaped like rolled-up parchment, meaning the kaolin can hold its colour extremely well and is incredibly strong when fired in a kiln.
For these reasons, halloysite-kaolin often finds its way to high-end markets. Andromeda made a break into just such a market last year when it secured an offtake agreement with Japanese porcelain and ceramics manufacturer Plantan Yamada.
“Plantan Yamada was looking for an extraordinary level of whiteness and brightness for their premium products, and our kaolin fit the bill,” Katsiouleris said.
Katsiouleris expects the partnership to last the duration of the Great White’s initial 28 year life of mine.
As Andromeda enters the financing and construction phase, Pascal Alexander-Bossy has been chief financial officer, to help steer the company’s future.
“We are actually ready to go; the only thing that’s stopping us right now is our funding,” Katsiouleris said.
“We are fully permitted and construction-ready. We’ve passed all of our environmental hurdles and now have a South Australian mining licence. We have got most of our long lead items ordered and starting to be built and delivered.
“We’re in the process of talking to debt investors. Once we’re fully funded, we can move onto construction in the coming months.”
Another ASX-lister, WA Kaolin, recently announced that its Wickepin project was the largest known primary kaolin deposit in the world, off the back of a 113 per cent increase to its ore reserves.
Despite the geographical challenge, it seems Australia is positioning itself as a global leader in yet another commodity.
This interview has been slightly edited for length and clarity.