VRX Silica has forecast that the price of silica sand will rise in line with demand and supply constraints from depletion and environmental restrictions on dredging across the Asia-Pacific region.
The Western Australia-based silica producer stated at its 2020 annual general meeting (AGM) that current demand is not being met by existing production.
According to the AGM, 120 million tonnes of silica sand was produced in 2019, while more than 130 million tonnes was consumed. China, Taiwan and Japan are the largest importers of the aggregate.
VRX Silica stated that developing Asia-Pacific (APAC) countries are driving up demand through infrastructure spending requiring more glass.
Asian glass-making production is increasing by five to six per cent per annum, according to VRX Silica.
“The foundry industry in Asia has grown as countries have gained manufacturing specialisation and automotive demand has risen,” VRX stated. “This industry represents a key growth market for silica sand over the coming years.
“Collectively, the foundry and glass industries represent 65 per cent of the APAC silica sand market and are high value targets for VRX’s products.”
VRX’s Arrowsmith silica projects – Arrowsmith North and Arrowsmith Central – and its Muchea project in Western Australia are scheduled to commence construction next year. Production at Arrowsmith will commence in 2021, while production at Muchea is slated for 2022.
Due to the project’s logistics solutions, they will have lower operating costs than domestic and international peers, VRX stated.
Arrowsmith is near an established rail network that travels directly to Geraldton Port. Both projects are adjacent to the Brand Highway.
VRX Silica has also reported strong interest from potential customers across Southeast Asia, with environmental permits applications for each project well underway.
Silica sand has a variety of uses, including glassmaking, metal casting, hydraulic fracturing, construction sand, filtration, metallurgical and ceramics.