Astron has entered into a binding five-year offtake agreement with Xiamen Xiangyu Logistics Group (XXLG) for the supply of heavy mineral concentrate (HMC) from the Donald Project in Australia.
XXLG, which is a subsidiary of Chinese group Xiamen Xiangyu, provides supply chain and logistics services.
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The contract covers the purchase of 100% of the HMC output, estimated at around 250,000 tonnes per annum (tpa), over an initial period of five years.
The agreement includes a take-or-pay arrangement and an option for extension by a further two years.
Under the terms, Astron is entitled to take and sell all HMC produced by the Donald Project.
Pricing and product specifications match those of Astron’s existing HMC purchase arrangements with the Donald joint venture. This structure aims to minimise exposure to differences in pricing and product requirements.
The price mechanism uses a market-based system linked to the titanium dioxide and zirconium dioxide content in the product, consistent with the assumptions in the Phase 1 bankable feasibility study for the project.
The agreement meets the HMC offtake obligations required under a recently disclosed senior debt package for the Donald Project.
It will become effective, subject to certain conditions, including a final investment decision (FID) on the Donald Project being reached by 31 December 2026.
According to Astron, XXLG has expanded its mineral sands business over the past five years and built relationships with mineral separation plants and downstream customers.
The supply deal guarantees a minimum annual quantity of 160,000t of HMC, containing about 70,000t of titanium dioxide and 30,000t of zirconium dioxide.
This minimum accounts for approximately 70% of expected average annual production over the contract period.
In addition, XXLG is required to take any extra HMC made available for delivery by Astron.
Astron may also receive a $5m prepayment within three months of starting operations, to be offset against later deliveries over two years.
The agreement also allows Astron to buy back up to 30% of the volume for processing at its own mineral separation plant in Yingkou, China, or at a third-party plant outside China.
Astron managing director Tiger Brown said: “Execution of the offtake agreement is a significant milestone for the Donald Project. Xiamen Xiangyu Logistics Group is a valuable partner for the Project’s mineral sands products, with an extensive, established mineral sands sales network in China and into Asia.”
