Zeotech Strikes MOU with MSI to Unlock 2.45 Million Tonnes of Kaolin and Clay Sales
Zeotech Limited has signed a non-binding MOU with global trading giant MSI to negotiate offtake agreements for its Toondoon Kaolin Project, potentially unlocking significant early cash flow and enhanced mining economics.
- Non-binding MOU executed with Jiangsu Mineral Sources International Trading Co (MSI)
- Framework established for potential offtake and distribution agreements over five years
- Minimum commitments: 800,000 tonnes low-iron kaolin, 150,000 tonnes pink cosmetic grade kaolin, 1.5 million tonnes bauxitic clay
- Bauxitic clay sales could convert previously stockpiled overburden into revenue
- MOU supports sustained mining operations and leverages Port of Bundaberg infrastructure
Strategic Partnership with MSI
Zeotech Limited (ASX: ZEO), an emerging player in mineral processing technology, has taken a significant step towards commercialising its Toondoon Kaolin Project by executing a non-binding Memorandum of Understanding (MOU) with Jiangsu Mineral Sources International Trading Co, Limited (MSI). MSI is a well-established international trading house based in China and ranks among the world’s leading independent bulk raw material traders.
This MOU lays the groundwork for negotiating binding offtake or distribution agreements for Zeotech’s direct shipping ore (DSO) products, including low-iron kaolin, pink cosmetic grade kaolin, and bauxitic clay. The potential partnership signals a pathway to early cash flow and sustained mining operations for Zeotech.
Volume Commitments and Product Mix
Under the proposed framework, MSI could commit to purchasing minimum quantities over a five-year term: 800,000 tonnes of low-iron kaolin, 150,000 tonnes of pink cosmetic grade kaolin, and 1.5 million tonnes of bauxitic clay. These volumes are substantial enough to underpin ongoing mining activities at the Toondoon site.
Notably, the inclusion of bauxitic clay, previously considered overburden, represents a value-add opportunity. By converting this material into a salable product, Zeotech can enhance the overall economics of the mining project, turning what would have been stockpiled waste into a revenue stream.
Operational and Logistical Advantages
The Toondoon Kaolin Project, located approximately 20 kilometres south of Mundubbera in Queensland, is one of Australia’s highest-grade kaolin deposits held under an approved mining lease. The project benefits from a straightforward open-cut mining operation with minimal overburden, facilitating efficient extraction.
Zeotech has also been collaborating closely with Gladstone Ports Corporation to utilise the Port of Bundaberg’s recently upgraded bulk mineral conveyor, ship loading system, and DSO storage facilities. This infrastructure is ideally suited for bulk kaolin shipments, potentially streamlining logistics and reducing costs.
Looking Ahead
The MOU is non-binding and valid until 31 December 2025, with either party able to terminate on 30 days’ notice. While the agreement sets a promising stage, final terms and binding contracts remain subject to negotiation. Zeotech’s CEO James Marsh highlighted the exceptional natural purity of Toondoon kaolin and the compelling commercial prospects presented by the pink cosmetic grade and bauxitic clay products.
As Zeotech advances the commercialisation of its AusPozz™ high reactivity metakaolin project alongside these DSO opportunities, the MSI partnership could be a catalyst for unlocking early revenue streams and validating the project’s economic potential.
Bottom Line?
Zeotech’s MOU with MSI could transform Toondoon’s resource potential into tangible cash flow, but binding agreements and market conditions will be decisive.
Questions in the middle?
- Will Zeotech and MSI finalize binding offtake agreements before the MOU expires?
- How will the inclusion of bauxitic clay sales impact Zeotech’s overall project economics and profitability?
- What are the logistics and cost implications of scaling shipments through the Port of Bundaberg?
