Here’s Why ASX Mineral Sands Stocks Are Gaining Momentum & Our Top 3 Picks

Mineral sands stocks may just be the most important resources stocks for investors to consider. Even though there are not many of them, their end uses are arguably the most important – yes, perhaps even more than copper or lithium.

 

What are mineral sands?

Mineral sands are naturally occurring materials that are made up of heavy minerals like zircon, ilmenite, rutile, and more. These minerals are usually found in sand deposits along the riverbeds, coastlines, and even under sea beds.

Mineral sands are formed over a natural process that spans millions of years. These processes include erosion and weathering to form crystals. When rocks containing these minerals break down (due to severe atmospheric conditions), these minerals are carried by the flow of river water and are eventually deposited along the coastlines.

Over time, the lighter materials wash away, leaving behind concentrated areas of heavy minerals. These are the mineral sand deposits that we extract today.

These valuable resources, which include zirconium (ceramics and electronics), titanium oxide (essentially in the form of rutile and ilmenite, also that is used in paints and coatings) are widely used in industries ranging from ceramics and paints to electronics and aerospace. As global demand for these minerals rises, certain ASX-listed mineral sands companies are gaining gradual momentum. They offer lucrative investment opportunities to investors looking to expand their portfolio and know more about the mineral sands stocks.

 

Why Mineral Stocks Are on the Rise

The need for mineral sand is increasing at a global level due to several key factors.

• Rising industrial demand – Mineral sands are critical to the production of ceramics, paints, electronics, and other high-tech products. When the need for these minerals rises in these specific sectors, then it is unavoidable to see an industrial-level demand for these minerals.
• Scarcity of the minerals and supply chain – Often hindrances in supply chain management of these minerals have made it harder to obtain these minerals. This will ultimately drive up the price. For example, titanium dioxide prices have seen a sharp increase in recent years due to tighter supply and higher demand.
• Environmental concerns – Mineral sands are becoming more valuable now than ever because the world is looking towards a possible shift to greener technologies at a massive rate. Titanium, derived from rutile and ilmenite, is used in lightweight and high-strength applications in industries like aerospace and electric vehicles (EVs).
• Energy efficient – Mineral sands are considered to be energy efficient because the industries are working towards reducing their carbon footprint and these mineral sands stand as a top choice because of their ability to produce less carbon compounds.

 

Factors That Drive Market Trends for Mineral Sands

The market trends of the mineral sand stocks are highly influenced by various factors.

Increase in Construction and Manufacturing

With every country on the globe working towards urbanisation and industrialisation, it has created a huge impact on the need for raw materials. Mineral sands are essential in the construction and manufacturing of machinery. Countries like China, India and are particularly focused on developing large infrastructural projects in the upcoming years. This is expected to drive the demand for mineral sands significantly.

Electric Vehicles and Aerospace

As electric vehicles have time and again proved that they are efficient replacements for traditional fuel-based vehicles, the demand for titanium as a primary component in EVs has risen. As it is lightweight and its a reasonable strength-to-weight ratio, it is a fundamental material in the production of aircraft. Titanium also offers better fuel efficiency and longer battery life in EVs.

Mineral Processing

New advancements in mineral separation and refining techniques have made it easier to extract these valuable resources while minimising environmental impacts.

 

Top 3 ASX Mineral Sands Stocks to Look Out for

It is established that mineral sands are gaining traction, here are a few ASX-listed companies that are capitalising on this trend.

 

Iluka Resources (ASX: ILU)

As one of the largest producers of zircon and titanium dioxide products on the ASX, this company is a significant player in the mineral sands space, selling over $1.1bn in 2024 and making $477m EBITDA and a $231m profit. It needs to be admitted that these figures are down by 9%, 18% and 33% respectively due to an increase in costs.

It has 4 projects: the Jacinth Amborsia and Cataby mines in SA and WA respectively, along with Narngulu processing and Capel processing in WA. Its 2 key commodities are zircon and rutile. Moreover, Iluka also has a 20% stake in Deterra Royalties, which led to $31m in dividends in 2024.

Iluka has been in mineral sands so long, that back when it first got started, zircon was sold almost exclusively to France for use in fluorescent lights, magnets and glass. But now, it is important for many industrial uses, most prominently in ceramic floor, wall tiles, foundry castings, refractory linings and in magnets that are used to power electric vehicles, wind turbines and fighter jets

Iluka has told investors 2025 has begun on a positive note from a demand perspective, although pricing reductions by competitors may prove a challenge.

 

Sovereign Metals

Sovereign Metals doesn’t just have any rutile deposit, but the world’s largest. Its Kasiya project in Malawi has a Mineral Resource Estimate of 1.8Bt at 1.01% rutile and 1.32% graphite, equating to 18Mt of rutile and 24Mt of graphite.

Sovereign Metals discovered the deposit in 2019 and it was the first rutile-dominant deposit found in over 7 decades. The PFS found a post-tax NPV of US$1.6bn (using an 8% discount rate), an IRR of 28% after tax, average annual EBITDA of US$415m and a consequential EBITDA margin of 64%. The mine is anticipated to last 25 years with an average annual production of 222ktpa rutile and 244ktpa graphite.

If you don’t want to take our word that this is worth considering, turn your eyes to Rio Tinto which spent $40.4m for a 15% stake in mid-2023.

 

Diatreme Resources (ASX:DTR)

Diatreme is focused on its Northern Silica, Galalar and Cape Flattery Silica projects in Northern Queensland. The company’s projects have a combined Mineral Resource of 463.7Mt and Ore Reserves of 79.5Mt.

Diatreme has a joint venture partner in Sibelco that has agreed to help it with technical and project development expertise, marketing and project finance. It holds a 26.8% stake in the project, which it spent $35m to acquire.

 

Conclusion

The rising demand for mineral sands at a global level has made these companies well-positioned to capitalise on these trends. Driven by global infrastructure expansion and technological advancements, mineral sands will remain a key commodity for investors to watch.

For those looking to capitalise on these trends, the mineral sands sector presents a compelling opportunity. With high demand, limited supply, and increasing technological reliance on these materials, ASX mineral sands stocks are poised for significant growth in the coming years.

 

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