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- Diatreme Resource’s proposed silica sand mine is one step closer to becoming a reality, with a second Memorandum of Understanding (MOU) signed by the privately-owned Wan Zhong Investment Group
- The tendered mine will provide roughly one million tonnes of silica sand to Chinese conglomerates Wan Zhong and the Fengsha Group
- Much of the product provided in these offtake agreements will be put to use in supplying Asia’s fast-growing solar panel market
Diatreme Resource’s proposed silica sand mine is one step closer to becoming a reality, with a second Memorandum of Understanding (MOU) signed by the privately-owned Wan Zhong Investment Group.
The proposed mine, situated in far north Queensland, could supply up to half a million tonnes of photovoltaic grade silica sand to the Chinese conglomerate.
Thursday’s agreement follows an initial MOU passed in July of this year. It outlined silica offtake with the Fengsha Group, one of China’s largest processors and suppliers of high-grade silica sand. The July MOU also supported the provision of 500 000 tonnes to Fengsha if the mine opens.
Much of the product provided in these offtake agreements will be put to use in supplying Asia’s fast-growing solar panel market. According to AlliedMarket Research, the emerging industry sector is poised to make $37.8 billion by 2020.
Diatreme CEO Neil McIntyre said the second MOU showed the global demand for silica and the subsequent project potential.
“Galalar is fast becoming an extremely desirable project as demonstrated by the recent scoping study and the latest MOU is another indication of the strength of demand for its premium-grade silica product,” Neil explained.
“The Chinese market consumes around a third of the world’s industrial silica and we are extremely encouraged by the interest shown by Wan Zhong, Fngsha and other groups in obtaining offtake from Galalar. We look forward to negotiating potential binding agreements that achieve mutually beneficial outcomes for all parties, including our project partner, Hopevale Congress,” he concluded.
Although both MOU’s are non-binding, they set up a framework for future agreements between the two parties.
The Galalar silica project is situated next to the world’s largest silica sand mining operation in North Queensland. The mine is predicted to provide 60 new jobs over an estimated mine life of 15 years.
Diatreme stocks gained 9.09 per cent this afternoon, currently selling for A$0.012 apiece.
