Andromeda Metals has signed a binding offtake agreement with critical minerals company Traxys for the purchase of kaolin products from the Great White project in South Australia for the first five years of production.
Under the agreement, Andromeda will supply Traxys with Great White CRM, a refined, dried, bagged product for use by end-users in the high-end ceramics market, and Great White HRM products, which is refined kaolin used as an additive in the concrete industry and other associated applications.
“We are excited to seal our comprehensive strategic partnership with Traxys,” Andromeda managing director and chief executive officer (CEO) Bob Katsiouleris said.
“Traxys is an ideal strategic partner for Andromeda, one in whom we can trust, and one that shares our commitment to meeting the increasing global need for superior industrial minerals.”
The agreement will see Andromeda sell 25,000 wet metric tonnes (wmt) of Great White CRM in the first year, increasing to 40,000wmt per annum in the second year, and 50,000wmt per annum from the third year and beyond.
As processing capacity increases, contracted volumes of Great White CRM will increase proportionately to 50 per cent of the available processing capacity, capped at 130,000wmt per annum.
In turn, Traxys will have exclusive marketing and distribution in the Middle East (excluding Egypt and Morocco), Turkey, Sweden, Denmark, Norway, Finland, Iceland, Poland, Brazil, India, Vietnam and Bangladesh.
Andromeda will also supply Traxys with 5000wmt of Great White HRM in the first year, increasing to 10,000wmt annually from the second year onwards.
The agreement supports Andromeda’s expanded Stage 1A+ production capacity and aids in the company working towards a final investment decision.
It also supersedes the previous non-binding heads of agreement between Andromeda and Traxys.
“The agreement with Traxys is a significant step towards Andromeda’s long-term success,” Katsiouleris said.
“Traxys’ binding commitment for significant volumes during the initial stages of production, and its support of future expansions, acknowledges both the high-quality of kaolin products from the Great White project and the certainty provided through securing an offtake from this new, large source of kaolin supply.”
Traxys CEO Mark Kristoff welcomed the agreement.
“The immense market opportunity of our strategic partnership with Andromeda has been confirmed in our recent market discussions with numerous kaolin customers across global markets,” Kristoff said.
“The established market for kaolin, currently valued at over $US4 billion ($5.9 billion) of sales per annum, continues to consistently grow in excess of GDP (gross domestic product) growth, due to growing use driven by supportive customer trends and increasing novel uses for kaolin in new and high-value applications.”
Kristoff said Andromeda’s presence as a near-term supplier of high-quality kaolin comes amid supply shortages driven by long-term global depletion of high-quality supply sources and geopolitical challenges such as the war in Ukraine.
“The positive demand/supply characteristics, together with Andromeda’s high-quality products and extensive kaolin resources, provide us confidence in the long-term nature of our strategic relationship,” Kristoff said.
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