Chinese zirconium play lists on the TSX

Rock samples taken from several Apollo space missions suggest that zirconium is found in higher concentrations on the moon than on earth, according to Canada’s National Research Council.

But that hasn’t stopped the Toronto Stock Exchange from taking a bet on China Zirconium (CZL-T), which made its debut on the Toronto bourse on August 15. The company listed 649,900 shares at C$1.20 apiece for proceeds of C$779,880.

On the Stock Exchange of Hong Kong, where it has been listed since 2002, China Zirconium is trading at about HK$6.40 per share (C$0.86) with a 52-week trading range of HK$4.50-$15.20. (One Canadian dollar is the equivalent of HK$7.37.)

China Zirconium, headquartered in Yixing, in coastal Jiangsu province, a city famous for its unique stoneware clay and earthenware, has an annual production capacity of about 45,000 tonnes of various types of zirconium chemicals.

The company opened its doors in 1977 and has grown to become one of the largest manufacturers and exporters of zirconium chemicals in the country. It has exported its productsunder the “Long Jing” brandto Japan, the U.S. and Europe for more than two decades.

The lustrous, corrosion-resistant, grayish-white metal resembling titanium has wide-ranging applications such as in the production of catalysts, cosmetics, ceramics, electronic materials, mobile electronic devices, jewelery (cubic zirconia), nuclear power reactors, paints, coatings, and refractory materials.

Because of its excellent resistance to corrosion, zirconium is often used as an alloying agent in materials that are exposed to corrosive agents, such as surgical appliances and explosive primers.

Zirconium alloys are used to make parts for space vehicles due to their resistance to heat, an essential quality given the extreme heat that is generated when space vehicles re-enter the atmosphere. Zirconium is also a component in some abrasives, such as grinding wheels and sandpaper.

Upon being collected from coastal waters, the solid mineral zircon is purified to remove excess sand and gravel and remove ilmenite and rutile. The refined zircon is then purified into pure zirconium by chlorine or other agents.

China Zirconium has extended its business and now produces zirconium-related new energy materials (used as electrode materials for batteries), electronic ceramic products and rechargeable batteries.

In 2004, the company set up a wholly-owned subsidiary specialized in making rechargeable batteries, including lithium-ion NiMH batteries. The company says it expects that power batteries for electric bicycles will be launched by the end of this year.

According to a 2007 report by the Roskill Consulting Group, which focuses on metals and minerals research, zircon prices reached almost US$750 per metric ton in 2006, nearly double those seen in 2002.

Zircon prices increased from about US$360 per metric ton in 2003 to US$840 per metric ton last year. Looking ahead, Roskill forecasts that with new projects scheduled to come on stream in the next few years, prices could slide to around US$450 per ton by 2011.

Overall growth in demand is likely to continue at around 3.8% per year, Roskill contends.

Asia (including China and Japan) makes up just under half (47%) of total world consumption of zircon, the consulting group notes.

Australia and South Africa account for 66% of total supply, with the United States and Indonesia “providing much of the rest.”