The closure of Rio Tinto's South African subsidiary Richards Bay Minerals (RBM) as a result of violent protests this week, may play into the hand of London- and Frankfurt-listed Bluejay Mining, which is developing the Dundas ilmenite project, in Greenland.
The project is said to be the highest-grade ilmenite asset in the world and the geographic location of Greenland – strategically located between North America and Europe – provides Dundas with a significant cost advantage over RBM, or other African, operations.
Analysts at London investment bank SP Angel said in a note on Wednesday that the violent intimidation at the South African operation might force Rio Tinto to find new supply for its Quebec ilmenite and titanium business in Canada.
They argued that the Quebec business, which produces raw materials for pigment manufactures, required a “cheap, high-grade feed to restore its fortunes”, pointing out that the Dundas project, with its high grade and favourable location, might be tempting to Rio Tinto.
The analysts said that should Rio Tinto buy Bluejay Mining, which also owns a nickel/copper/platinum project in Greenland and other assets in Finland, the major could restore value to the titanium mineral sands business and offload it in a rerun of fellow diversified miner BHP Billiton’s flotation of South32 in 2015.
The Dundas project, formerly the Pituffik titanium project, is at an advanced stage and has a total resource of 96-million tonnes at 6.9% ilmenite. This includes the newly identified area of mineralisation at Iterlak Delta, where Bluejay is currently undertaking an exploration programme.
The company aims to establish a mining operation by 2019 and is busy completing studies to support this goal.