Sri Lanka, long known for its rich reserves of industrial minerals, is on the verge of a historic milestone as one ASX-listed company, Titanium Sands (ASX: TSL), edges closer to launching the country’s first independent bulk export mineral sands project, said a report published by the Stokhead.

The report by Jessica Cummins said that the project is set to transform the island nation’s mineral sands industry, with the potential for significant economic benefits and long-term growth.

Titanium Sands’ Mannar Island project is home to a massive 318Mt resource containing 4.17% total heavy minerals (THM), predominantly ilmenite. This high-value mineral, used mainly in the production of titanium dioxide (TiO2), plays an essential role in the manufacturing of a wide range of consumer products, including paints, fabrics, cosmetics, and advanced components for high-performance metal parts like aircraft engines. In recent years, its applications have expanded into green-energy technologies, such as advanced coatings for energy-efficient buildings and renewable energy solutions like solar panels and wind turbines.

The company’s scoping study in 2023 has outlined an impressive Stage 1 NPV of $545 million for the project, with a low capital expenditure of $122 million and a rapid payback period of under two years. These factors position Titanium Sands to become a globally competitive ilmenite producer, with a 4Mtpa operation expected to run for at least 20 years.

With major regulatory hurdles now cleared, including the release of key Terms of Reference from Sri Lanka’s Central Environment Authority for an environmental impact assessment (EIA), Titanium Sands is gearing up for its transition from explorer to operational processor. The company aims to submit the final EIA by mid-2025, which will be pivotal in securing the industrial mining licence needed to move forward with production.

Construction at Mannar Island could begin as early as later this year, pending financing and market conditions. Early studies indicate the project could extend its life to up to 40-50 years, further cementing its long-term viability.

The potential benefits for the local economy are substantial. Once operational, the project is expected to produce up to 150,000 tons of heavy minerals annually and employ up to 1,200 people, providing a significant boost to the region. In turn, government revenues from the project are projected to increase by around $2 billion.

The Mannar Island deposit spans a 12m thick sequence of unconsolidated sands, which are less than 8,000 years old. These sands stretch across two continuous zones measuring 10-12 km long and 1-3 km wide. The project site is well-connected to infrastructure such as roads, railways, and power lines, facilitating efficient access and operations.

While the country’s Lanka Sands Corporation, a state-owned enterprise, has been Sri Lanka’s primary ilmenite producer for over 50 years, the Mannar Island project could mark the dawn of an exciting new phase for Sri Lanka’s mining industry. Titanium Sands’ success could not only increase foreign investment but also help diversify the nation’s economy.

Ilmenite, often referred to as ‘black gold’ due to its high economic value, is primarily found along Sri Lanka’s eastern and southern coastlines, typically in beach and dune environments where the erosion of rocks over millennia has concentrated heavier minerals. The demand for ilmenite continues to grow steadily at an annual rate of 4-5%, driven by its use in pigments for quality-of-life products.

Dr. James Searle, Managing Director of Titanium Sands, noted that the continued growth of global GDP correlates directly with increased consumption of ilmenite. “Ilmenite is a steady growth commodity, not volatile like nickel, gold, or cobalt,” he explained. The company’s Stage 1 plan includes producing 120,000 tons of ilmenite annually, with the potential to expand output in the future. The high-quality ilmenite produced at Mannar Island is expected to meet demand from pigment producers in regions like the Middle East, Korea, India, and China.