In a bid to expand its saleable product range and enhance production efficiency, Suvo Strategic Minerals Ltd (ASX:SUV) has blended hydrous kaolin from its Pittong operations in Victoria with ground calcium carbonate (GCC).
This development is a part of Suvo’s ongoing efforts to explore all potential avenues for increasing margins, whether through cost reduction or by tapping into premium market segments.
Step forward with new blend
The success of this initiative could represent a significant step forward in Suvo’s operational capabilities and market positioning.
Product development work taking place at the company’s Pittong laboratory involves combining the company’s flagship product, Pittong hydrous kaolin, with GCC, which is imported to Melbourne port at a cost of around US$95 per tonne.
This cost is significantly lower than the production expenses for Pittong hydrous kaolin, presenting an opportunity for Suvo to increase its output beyond the current annual production capacity of 50,000 tonnes while also reducing production costs.
The Pittong lab team has embarked on lab-scale trials, blending varying proportions of GCC – 10%, 20%, and 30% – with Pittong’s hydrous kaolin. This blending process is anticipated to yield an additional saleable product ranging from 1,000 to 15,000 tonnes annually, depending on the blend percentage and production quantity.
Increased volume, new markets
This product development is not just about increasing volume, it's also about targeting high-value markets. The blended product is expected to be suitable for premium applications like top coating in paper production and high gloss paints, given GCC’s superior whiteness and brightness properties.
Pending the success of these initial lab-scale trials, Suvo plans to upscale production and prepare a 25-kilogram batch sample.
This would enable the distribution of one-kilogram samples to potential customers for testing and evaluation, with the aim of completing this process by the end of the first quarter of 2024.
Interim CEO Bojan Bogunovic said: “We are pleased to start this test work with our hydrous kaolin to produce a blended, cost-effective product which has the ability to increase the saleable product quantity from our Pittong operations.
“Blending with GCC is complementary to our existing operations and the blended product is used in most applications where kaolin is used.
“We remain focused on selling the Pittong hydrous kaolin to traditional kaolin markets, but we believe it is prudent to also investigate product development opportunities that can yield even better results for the company.
“The GCC samples have arrived in Australia and the lab-scale test work at Pittong can commence immediately, allowing Suvo to distribute samples to end-users for testing and product evaluation in the short term.”