Andromeda Metals Limited
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Why has Andromeda Metals signed a Heads of Agreement for Indian and global markets?
Andromeda Metals Limited (ASX: ADN) is excited to announce that it has signed a Heads of Agreement (HoA) to explore business opportunities in the Indian industrial minerals market. The agreement includes the distribution of kaolin and the potential development and distribution of kaolin-zircon mixtures.
What is the HoA and who is it with?
The non-binding HoA is with Opaque Ceramics Pvt Ltd (Opaque), an established Indian company based in Ahmedabad, Gujarat. Opaque has been trading zirconium silicate opacifiers since 1978 and is a leading ceramic mineral technology company with a wide range of micronised zircon products.
What are the key terms under the HoA?
The HoA outlines several key terms for discussion between Andromeda and Opaque. These terms include:
Opaque purchasing 5,000-10,000 metric tonnes per annum of Andromeda's Great White CRM™ for direct sales and distribution in various markets, including India, Bangladesh, Sri Lanka, the Middle East, Saudi Arabia, and Oman. The targeted markets include ceramic tile, ceramic glaze, porcelain tableware, and sanitaryware.
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Collaborating on the development of a new product that incorporates an additional 5,000-10,000 metric tonnes per annum of Andromeda's Great White kaolin. This new product aims to enhance or expand Opaque's existing range of zircon-based products by utilizing the unique qualities of Great White kaolin, such as its high-brightness and its potential as a replacement for zircon.
Agreed upon offtake term of 5 years, with the first shipments planned for the first quarter of calendar year 2025.
What is the purpose of the HoA and what happens next?
The purpose of the HoA is to establish a framework for further discussions and negotiations between Andromeda and Opaque. The goal is to reach binding offtake agreements in a timely manner and in good faith. These agreements will be based on customer acceptance and validation.
Why is the Indian market important?
The Indian market is the second largest ceramics market in the world and is projected to continue growing. It is estimated that ceramic tile production in India will reach 3. 3 billion square meters by 2024, with a compound annual growth rate of 9-10%. India's strong population growth, surpassing that of China, contributes to its thriving ceramics industry.
In conclusion, the signing of the Heads of Agreement between Andromeda Metals Limited and Opaque Ceramics Pvt Ltd opens up exciting business opportunities in the Indian industrial minerals market. The agreement aims to expand distribution channels and develop innovative products to meet the demands of the growing ceramics industry.
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