Suvo secures 3-year sales extension for hydrous kaolin contract

Suvo has extended its contract with Norske Skog for 21,000-24,000 tonnes hydrous kaolin to 2027.

Suvo is also progressing commercialisation of its low carbon geopolymer concrete formulation. Pic: Getty Images

• SUV extends major sales contract to supply hydrous kaolin to December 2027

• Norske Skog estimates it will buy 21,000-24,000 tonnes over the new 3-year term, representing a potential 47% increase in volumes as SUV supplied 16,300 tonnes under the previous 3-year deal

• New multi-million-dollar deal also attracts a higher selling price

 

Special Report: Suvo Strategic Minerals has extended its sales contract with Norske Skog to supply hydrous kaolin from its Pittong operation in Victoria for a further 3 years – until December 2027.

Pittong is the sole wet kaolin mine and processing plant in Australia with a name-plate capacity of 60,000 tonnes per annum and has been in operation since 1972.

The resource boasts over 18 million tonnes of JORC-compliant inferred and indicated kaolin, which is a type of clay that can be used many industries including as a supplement to Portland cement thereby reducing emissions in the concrete industry.

Suvo Strategic Minerals (ASX:SUV) has already established a good customer base for the kaolin products, particularly within the high-end automotive paints, pharmaceuticals, cosmetics, and plastics industries, with clients including Dulux, Nippon Paint, and even BodyShop and Estee Lauder.

Norske Skog purchased around 16,300 tonnes under the previous year contract - now expecting to increase those orders between 21,000-24,000t over the extended term.

“We welcome this contract extension with Norske Skog which demonstrates Suvo’s ability to supply large quantities of kaolin products,” SUV executive chairman Aaron Banks said.

“The increase in demand from one of our major customers means that we anticipate significant growth in sales volumes in 2025 based on orders from existing customers.”

“We also await feedback from other customers performing larger batch trials with our kaolin products, and specifically the test work on-going in Japan for the use of our kaolin to control and capture inhalable particulate lead emission from municipal solid waste incineration.”

The new contract commences January 2025 and is under the same terms and conditions as the previous contract, incorporating a CPI price adjustment.

Potential trillion-dollar market opportunity

Suvo is also progressing commercialisation of its low carbon cement and concrete formulations with joint development partner PERMAcast, one of the largest concrete companies in Australia.

SUV is looking to develop various low carbon binders, using kaolin and or waste materials, as a replacement for the traditional binder known as Ordinary Portland Cement which represents a whopping 8% of global CO2 emissions – or equivalent to the entire global car fleet.

One of their existing formulations is made with nickel slag, which itself is a waste product from making nickel pig iron which would usually be discarded to landfill.

There’s a massive market opportunity here for the company, since the global cement industry representing a nearly trillion-dollar market.

“Test work is set to commence utilising our kaolin as a supplementary cementitious material, with the aim being to displace Portland cement used in concrete by creating a lower carbon alternative,” Banks said.

This article was developed in collaboration with Suvo Strategic Minerals, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

Originally published as Suvo secures 3-year sales extension for hydrous kaolin contract