FOCUS ON

P I G M E N T S
A MONTHLY REPORT FROM AN INTERNATIONAL NEWSLETTER MONITORING TECHNICAL AND
REG ADAMS COMMERCIAL DEVELOPMENTS IN THE PIGMENTS SECTOR ISSN 0969–6210

APRIL 2011
In this issue PREMIER WHITE MINERAL PIGMENT
SUPPLIER WILL ADD TALC TO ITS
PORTFOLIO: IMERYS TO BUY
MARKETS 3-5 RIO TINTO’S LUZENAC
Rockwood raises prices for On 23 February 2011, Imerys based emulsion paints. Jetfine-3CA
iron oxide, chromium oxide (headquartered in Paris) announced and Jetfine-1CA are similar micronised
green & speciality pigments that it had made a formal binding offer grades, marketed for high-end polymer
to Rio Tinto (headquartered in London) applications. The HAR (denoting high
Eckart raises metallic pigment
to acquire the entire business and aspect ratio) grades are produced via a
prices by 6%
assets of the Luzenac group. The offer proprietary delamination technique.
TiO2 buyers resist 2Q 2011 price values Luzenac at $340 M. The Rio With an aspect ratio that is up to five
hikes of $300-500 per tonne Tinto Board has indicated that the offer times that of standard talc grades,
Global spending on speciality is acceptable, but it will defer its formal Luzenac’s HAR grades impart excellent
pigments reaches $1.75 bn response until it has had time to impermeability (barrier protection),
complete consultations with the especially to oxygen and water vapour.
PLANTS 5-7 relevant European works councils. They are marketed for corrosion-
Rio Tinto had made clear its resistant paints and for tyre inner liners
Schulman to close masterbatch
intention to divest its talc business protecting the steel reinforcing plies.
plants in Australia & Italy
towards the end of 2007 as part of a Talcs de Luzenac was founded in
New masterbatch plants in China major programme to sell off non-core 1905 and became part of the Rio Tinto
for Cabot & Sumika assets, with the aim of raising about group in 1988. It consolidated its position
Tokai considers Brazil & India for $10 bn in cash proceeds. Rio Tinto had as the world’s largest talc producer with
new carbon black investment taken on a $40 bn bank loan in order to the acquisition of Cyprus Industrial
SMI/MTI lands two satellite PCC finance its $44 bn acquisition of the Minerals’ talc assets in mid-1992.
projects for paper mills on Alcan aluminium group, so that its
Luzenac: Talc Output
India’s east & west coasts gearing (net debt as a proportion of
(‘000 tonnes)
Continental confirms timetable total capital) was at an all-time high of
for Indian carbon black project 63.2% at the end of 2007. However, no 1994 1022.0
Sabic & ExxonMobil settle on serious bids for the talc business were 1995 1058.0
Al-Jubail for 400,000 tonnes/y received during 2008/09 and by the 1996 1105.0
carbon black project end of 2009 it seemed that all four of 1997 1174.0
the group’s major industrial minerals 1998 1195.0
activities – TiO2 feedstock, borates, salt 1999 1269.0
EVENTS 8 and talc – would continue under the 2000 1261.0
aegis of Rio Tinto. In fact, Rio Tinto has 2001 1266.0
been actively promoting several 2002 1329.0
product innovations, notably the Jetfine 2003 1357.0
and HAR series. (Ref 1). The Jetfine 2004 1443.0
grades are produced via a proprietary 2005 1364.0
micronising process. Jetfine-1A is 2006 1392.0
highly lamellar (plate-like) and 2007 1281.0
hydrophobic, has a median particle size 2008 1163.0
of less than 1 micron and is readily 2009 888.0
dispersible in gloss alkyd or water- 2010 1000.0

PIGMENTS PIGMENTS PIGMENTS PIGMENTS PIGMENTS PIGMENTS

Luzenac employs about 1000 people and Guangxi provinces (China) and 2007 of Mondo Minerals by Omya to
worldwide and operates talc mines and Parana province (Brazil). About 20% of Hg Capital (a private equity fund, with
processing facilities in 10 different current world talc production comes offices in London, Amsterdam and
countries. It has two major research from serpentinite (aka soapstone) Munich). Mondo is the world’s second
centres, one at Toulouse (France), the deposits in Vermont (US), Ontario largest talc producer, with a capacity
other at Denver, CO (United States). (Canada) and Finland. The ore is of about 760,000 tonnes/y. (Ref 5).
Last year, Luzenac produced a global typically grey and needs to be The other major development has
total of 1.0 M tonnes of talc. This was upgraded by flotation to increase its talc been the consolidation of ownership
well below the 2004 peak of 1.443 M content and whiteness. About 10% of within the Chinese talc sector. In
tonnes. Nevertheless, it was a 12.6% current talc production comes from 2005, the Chinese Government
improvement on full-year 2009, when deposits generated by the initiated a policy whereby the larger
talc sales were hit by the sharp transformation of quartzite with silico- producers were encourage to
downturn in both the automotive and aluminous rocks, such as schist and purchase and integrate the small and
construction industries, especially in gneiss. The best known example of this medium-size producers, so as to
North America. Luzenac’s sales type of deposit is at Trimouns on the optimise the country’s resource
revenues were reported as $340 M for northern slopes of the Pyrenees utilisation. By mid-2009, there were
2009 and they are expected to be of Mountains, 1700 metres above sea- eight major companies, accounting for
the order of $400 M for 2010. The level. This talc ore contains significant 1.1 M tonnes/y of talc production in
company’s talc mines are located at: quantities of chlorite. China. They are namely: Aihai, Beihai
Trimouns (France); Rabenwald and For an article published in ‘IM’ and Pingdu (each supplying more
Kleinfeistritz (Austria); Respina and (Ref 3), Mr Ian Wilson (the well-known than 200,000 tonnes/y); and
Tres Amigos (Spain); Rodoretto (Italy); consultant, specialising in white mineral Guiguang, HuamEi, Laizhou,
Yellowstone, MT; Argonaut, VT; and pigments) calculated world talc Longguang, and Shuiquan (each
Penhorwood, ON (North America); and production at 6.1 M tonnes in 2008. supplying more than 100,000
Three Springs (Australia). Its talc World consumption was of a similar tonnes/y). Further consolidation within
processing facilities are located at: order, with 40% being accounted for by the Chinese talc sector is anticipated.
Luzenac (France); Oberfeistritz and the paper industry; 18% by the plastics Assuming the acquisition goes
Weisskirchen (Austria); Bonar Leon, La and polymers industry; 13% by the ahead, Imerys will inherit Luzenac’s
Vega and Mijas (Spain); Mallanagio ceramics industry; 12% by the paint position as the world’s largest supplier
(Italy); Ghent (Belgium); Three Forks industry; and 17% for other of talc. This will further consolidate its
and Sappington, MT; Ludlow, VT; and applications. Mr Bob Virta (of the US role as the leading producer of white
Houston, TX (United States); Timmins, Geological Survey) reported total global mineral pigments. Imerys is already the
ON (Canada); Mexico City (Mexico); sales of talc of US origin as 619,000 world’s largest supplier of kaolin and
and Three Springs (Australia). Luzenac tonnes, worth $75 M in 2008 and the world’s second largest supplier of
also has a 60% stake in the Nihon 562,000 tonnes, worth $66 M in 2010. ground calcium carbonate (GCC). It is
Mistron joint venture in Japan, its The breakdown of US talc sales, by also one of the world’s top four
partners being Toyota Tsusho and volume, for 2010 (with the comparable suppliers of precipitated calcium
Sobue. Nihon Mistron operates talc figures for 2008 in brackets) was carbonate (PCC). In the non-pigment
processing facilities at Tomakomai reported as: 23% for ceramics (down sectors of the industrial mineral
(Iburi prefecture) and Suzuka (Mie from 31% in 2008); 19% for paint segment, Imerys is also the world’s
prefecture). (unchanged on 2008); 19% for paper leading supplier of diatomite- and
According to the US Geological (down from 21%); 9% for plastics (up perlite-based products for filtration; of
Survey (Ref 2), world production of talc from 5%); 7% for roofing materials (up various minerals for breathable polymer
and pyrophyllite was 7.45 M tonnes in from 6%); 4% for cosmetics (up from films; of mica for engineered plastics
2010, 7.43 M tonnes in 2009 and 7.58 2%); 3% for rubber (down from 5%); and high performance coatings; of
M tonnes in 2008. These figures and 16% for other applications (versus alumino-silicate monolithic refractories;
exclude the estimated 50,000-80,000 10% in 2008). of silico-aluminous minerals for
tonnes/y of pyrophyllite produced in the Back in 1994, world talc refractories; of minerals for abrasives;
US, but include the 1.4-1.6 M tonnes/y consumption was estimated by of high performance graphite powders;
of pyrophyllite produced elsewhere in Roskill’s at 6.4 M tonnes, broken and of fused zirconia.
the world (notably in Japan, South down as: 43% for paper; 21% for Over the past 10 years, Imerys has
Korea, Brazil and India). Talc is ceramics and refractories; 9% for nearly doubled in size, in terms of
essentially hydrated magnesium plastics; 8.5% for paint; 5.5% for sales revenue and its growth has
silicate, whereas pyrophyllite is rubber; 1.9% for cosmetics; 1.9% for been fostered by a number of
essentially hydrated aluminium silicate. agrochemicals; 0.9% for rubber; and strategically important acquisitions.
About 60-70% of current world talc 9% for other applications (Ref 4). The The company – at that time known as
production comes from magnesium- steep decline in the offtake of talc by Imétal – first entered the white mineral
rich deposits, formed by the the world’s papermakers over the past pigments industry in 1992, with the
transformation of dolomite and 16 years has been more than offset acquisition of Dry Branch Kaolin from
magnesite in the presence of silica. by higher usage of talc for plastics Georgia Kaolin. By 1998, Imerys had
This type of deposit, with some of the and for paint. built on the Dry Branch business to
purest and whitest talc, is found in On the supply side, one of the major become the world’s third largest
Montana (US), Liaoning, Shandong changes in the industry was the sale in supplier of kaolin for papermakers,

2 APRIL 2011
 FOCUS ON PIGMENTS

with a 13% share of the market. In TiO2 buyers resist 2Q 2011 price hikes
April 1999, it paid $1.2 bn to acquire MARKETS of $300-500 per tonne
the entire business and assets of the
English China Clays (ECC) group and Rockwood raises worldwide prices for Price increases for TiO2 pigment had
thereby inherited ECC’s position as been posted for almost every quarter
iron oxide, chromium oxide green &
the world’s largest kaolin producer. In onwards from 2Q 2004, but then there
speciality pigments
2000, Imerys became an important was a self-imposed moratorium on
supplier of fused minerals with the Rockwood Color Pigments & Services further price announcements onwards
acquisition of Treibacher Schleifmittel notified customers of worldwide price from October 2008. This lasted for
and it consolidated its position still increases of up to 10% for selected about eight months. After that, the
further with the acquisition in 2007 of products within its portfolio, including major multinational suppliers began
the UCM group in May 2007 and with yellow, red and black synthetic and again trying to push up prices, initially
the acquisition later that year of natural iron oxides, carbon blacks, by about $50-150 per tonne, scheduled
Astron’s fused zirconia and fused chromium oxide greens and various to take effect in July/August 2009. (See
silica assets in China. Also as part of speciality pigments. The price also ‘Focus on Pigments’, Feb 2009,
the $200 M acquisition of Astron increases were scheduled to take 1-3 & Jun 2009, 4 & Aug 2009, 3).
assets, Imerys became one of the effect as from 15 February 2011. Price increases posted throughout
world’s leading suppliers of zirconium 2010 tended to be less cautious, being
Press Release from: Rockwood Pigments, Beltsville,
chemicals and of micronised zircon MD 20705-1333, USA. Website: typically of the order of $175-250 per
opacifiers. In July 2010, Imerys paid http://www.rpigments.com (3 Jan 2011) tonne. Reviewing market trends over
$70 M to acquire Vale’s 86.2% the past 18 months, it is clear that,
majority stake in Para Pigmentos, with following a steep decline during 4Q
a kaolin capacity of 800,000 tonnes/y 2008 and 1H 2009, the recovery in
Eckart raises worldwide metallic
based in northern Brazil. TiO2 demand in all regions was much
pigment prices by 6% stronger than had been anticipated.
For full-year 2010, Imerys reported
net income at €241 M on sales Eckart (part of the Altana group) has Artikol estimates that world TiO2
revenues of €3.35 bn. That compares announced worldwide price increases pigment consumption increased by
against €41.3 M on €2.77 bn in 2009. of 6% for its metallic effect pigments 9.0% in 2010, reaching 5.015 M
Its Pigments for Paper segment and printing inks. The company tonnes, following year-on-year declines
(including the newly acquired Para states: “The price increases became of 1.0% in 2008 and 11.5% in 2009.
Pigmentos) contributed €767 M to necessary because significant cost Meanwhile, during the past two
group sales, while the Ceramics, increases, mainly in the field of years there have been significant
Refractories, Abrasives & Foundry energy and labour, can no longer be cutbacks in TiO2 production resulting
Minerals segment contributed €1.105 absorbed.” Meanwhile, Eckart’s policy from temporary or permanent plant
bn; Materials & Monolithics of making quarterly price adjustments closures, notably at Ashtabula,
contributed €923 M; and Performance for all its copper-containing pigments, Baltimore and Savannah (in the US)
& Filtration Minerals contributed €595 depending on fluctuations in world and at Huelva, Le Havre and
M. (Ref 6). The Luzenac business will copper prices, remains in place. Thus, Stallingborough. Both producers and
probably be integrated within the the surcharges applicable for 1Q 2011 consumers curtailed their pigment
Pigments for Paper segment, but – shipments are: €4.35 per kilo for inventories, which inevitably under-
given the increasing importance of bronze pigment powders and €3.92 mined potential customer resistance
customers other than papermakers for per kilo for bronze pigment pastes. to the upsurge in prices. During a
kaolin, calcium carbonate and talc – According to a survey by ‘FuL’, teleconference seminar convened to
perhaps Imerys should consider average prices paid for metallic effect discuss the company’s 2Q 2010
renaming this segment. pigments in Germany, sourced from results, Mr Peter Huntsman (CEO of
Eckart, BendaLutz, Silberline and Huntsman Corp) said: “As of early
Reg Adams
others, have risen by 4-8% per annum August 2010, our TiO2 pigment
over the past five years. Prices for inventory represented only 37 days’
gold bronze pigments have risen by sales. That was the lowest level for
1) Pitture & Vernici, Nov/Dec 2010, 86 (11/12), 15 two years, largely because of
(in Italian & English) 6-8% per annum, while prices for
2) Mineral Commodity Surveys 2010: Talc & aluminium pigments have risen by improvements in demand in Asia and
Pyrophyllite (Available from: The Superintendent of 3-4% per annum. Over the next five Europe. We estimate current industry
Documents, US Government Printing Office, PO operating rates at 97%.” Rockwood
Box 979050, St Louis, MO 63197-9000, USA.
years, prices for metallic pigments are
Tel: +1 866 512 1800. Fax: +1 202 512 2104. forecast to increase by 3-5% per reported that TiO2 supplies to several
Electronic copies can be downloaded from website: annum. The trend of above-inflation of its customers had been rationed
http://www.usgs.gov) price increases for metallic pigments with effect from early August 2010, ie
3) ‘Talc sorted for plastics’, Industrial Minerals, Sep customers received less than 100% of
2009, (504), 30-41 appears not to have weakened
4) ‘Talc: Volume softens, but prospects are good in demand in the automotive paint or the quantities originally ordered. In
high-value niche markets’, Focus on Pigments, household appliance sectors. October 2010, Mr Timothy McKenna
May 1996, 1-2 stated: “I suspect this (rationing
5) Focus on Pigments, Dec 2007, 6 Press Release from: Eckart, Germany. Website:
policy) will continue indefinitely. We
6) Annual Report from: Imerys Group, 154/156 Rue http://www.eckart.net (28 Feb 2011) & Farbe und
de l’Université, F-75007 Paris. Website: Lack, Jan 2011, 117 (1), 15 (Website: have also been raising prices and will
http://www.imerys.com (15 Feb 2011) http://www.farbeundlack.de/) (in German) continue to do so.”

APRIL 2011 3