Asia Zirconium aims to guarantee raw material availability and rein in costs
Industrial chemical producer Asia Zirconium is looking to co-operate with or invest in overseas resource companies to guarantee supply of zircon ore and better control its raw material costs.
Yang Xinmin, the chairman of the Jiangsu-based maker of zirconium chemicals, yesterday said ore prices had risen from US$120 per tonne 30 years ago to between US$750 and US$800 due to growing demand and limited supply.
'Tight supply of the mineral is expected to continue in the next three years,' Mr Yang said, adding that the mineral was trading in the mainland at almost 11,000 yuan per tonne - a 70 per cent premium to international prices - because of speculation by traders.
The shortage resulted partly from the world's largest zircon ore producer, Australian-based Iluka Resources, terminating its relationship with its sole distributor on the mainland.
Zirconium chemicals are refined from zircon ore and used in the production of cosmetics, artificial jewellery, optical fibres, ceramics, mobile-phone components, fireproof materials and nuclear energy.
'We hope to buy some stake in an ore supplier so as to better guarantee our supply, or we would like to participate in new mining expansion projects,' Mr Yang said, adding his firm was most likely to co-operate with an Australian supplier. The company buys about 70 per cent of its ore from Iluka.