Sierra Leone braces for return to titanium riches

While Sierra Leone braces itself for the return of the titanium riches era, the country still has to tackle rampant corruption which is behind the failure of its citizens to benefit from its huge diamond resource.

WINDHOEK -  When Mauritian-born mining magnate Jean-Raymond Boulle, announced his intention of reviving the Sierra Rutile mine in Sierra Leone after having acquired it from New York-quoted Nord Resources and Australia's Consolidated Rutile, in the peak of that country's mineral-funded civil war, he reportedly struggled to find investors prepared to gamble with the project.
The mine, in south western Sierra Leone, had closed due to the civil war, sparked mainly by the country's rich diamond resource, which ended in 2002.
According to a Financial Times (Deutschland) report in late October, Boulle explained that he "had acquired the world's biggest deposit of top-grade titanium ore, known as rutile, that he had high-level European and US diplomatic backing (with Walter Kansteiner, former US assistant secretary of state for African affairs as non-executive chairman of Titanium Resources Group), and that peace had returned and that attitudes changed.
The newspaper also reported that Boulle's record in picking winners, notably a highly lucrative nickel deposit at Canada's Voisey's Bay, as well as a €25 million European Union loan, reassured investors, resulting in Ospraie Management, a New York-based hedge fund, buying the biggest stake.
Rutile, a high titanium-bearing feedstock which is dredged from lakebed sludge, is used in the manufacture of titanium dioxide pigments used in paint, paper and plastics, titanium metal and industrial applications such as welding rods.
Last year, Boulle's company, AIM-quoted Titanium Resources Group spent US$100 million restarting production at both its rutile and bauxite properties in the country. While restarting the mine was a gamble for Boulle, this was the country's largest foreign direct investment post-civil war and the country was this week bracing for a return to the era before the war when titanium production contributed more than half of Sierra Leone's foreign currency earnings.

The company Monday invested US$27.5 million in commissioning a second dredge which will come online by December 2007, with the first shipments scheduled for January 2008.  Production capacity of the two dredges will increase to 200,000 tons of rutile per annum, sending what President Ernest Bai Koroma describes as "clear signals to the international community that Sierra Leone is once again an attractive destination for investment".

Titanium Resources Group said the doubling of rutile production will help the company to further consolidate its position in rutile markets and increase market share to about 23%.

But getting to that annual production target would only be reached in 2008 after high fuel costs, that resulted in first half losses, have been eliminated, Andy Mills, a consultant at the group, told Mineweb.
The group reported a pretax loss of US$5.27 million compared with a loss of US$5.18 million last time, while sales rose due to demand to US$34.7 million from US$14.9 million year ago. Mills says that there is no link between fuel costs and levels of production, despite the fact that the company attributed its first half losses to increased fuel costs.

To reduce fuel costs, Titanium Resources is installing a new heavy fuel generator that will become operational in mid 2008. 
A third dredge, which is expected to add capacity of 40,000 tons a year, is expected to come into production in mid-2008.
While Sierra Leone looks forward to the wealth that will be generated from its rutile resource, the country still has to tackle rampant corruption, the main reason behind the failure of its huge diamond resource to benefit most Sierra Leoneans, who remain amongst the poorest in the world.

Mineweb - JUNIOR MINING - Sierra Leone braces for return to titanium riches