Zeotech Finalises $204 Million Kaolin Offtake Agreement with Chinese Trading Giant Jiangsu MSI

Zeotech (ASX: ZEO) has signed a kaolin offtake agreement worth as much as $204 million with Chinese trading house Jiangsu Mineral Sources International (MSI), which has committed to receive 950,0000 tonnes of direct shipping ore (DSO) products over the initial term of five years.

This number is significantly higher the total product volumes forecast in Zeotech’s recently released preliminary feasibility study (PFS) for the AusPozz project.

The agreement follows the two companies signing a binding offtake term sheet in August that set out the core terms of the agreement, and a non-binding Memorandum of Understanding in May that established the framework for subsequent negotiations.

Record Offtake Deal

Chief executive officer James Marsh said the agreement represents Australia’s largest kaolin offtake deal—delivering an average net margin of more than 45% across the initial term, based on committed volumes and Year 1 pricing.

“Partnering with MSI, one of the world’s leading bulk raw material trading companies, represents a major commercial milestone for Zeotech and highlights the outstanding quality of our kaolin resources.”

“The capital it generates will provide a strong platform to advance the AusPozz project and support our goal of contributing to the decarbonisation of concrete in the built environment.”

High-Purity Kaolin

Zeotech produces AusPozz using high-purity kaolin from its Toondoon deposit in Queensland, where the company has accelerated its focus on progressing approvals in preparation for mining.

Zeotech has also signed a letter of intent with Gladstone Ports Corporation (GPC) in Queensland to develop AusPozz manufacturing and bulk storage facilities on designated GPC land at the Port of Bundaberg.

Previous studies estimated a capital cost of $7.6m to commence mining operations, comprising $4.8m in Year 1 and $2.8m in Year 2.

The company is assessing the opportunity to Use the Year 1 operating cash flows to fund the capital requirements for Year 2.

Robust AusPozz PFS

The June 2025 PFS estimated $1,604m in annual EBITDA for the project, along with after-tax cashflow of $1,014m, a net present value of $406m, and a 42% internal rate of return over a 20-year Life of Mine (LOM), supported by a measured and indicated kaolin resource of 10.87Mt.

The study also confirmed the technical viability of producing high-reactivity metakaolin for use as a supplementary component in low-carbon concrete.

Zeotech plans to upgrade this to a definitive feasibility study in Q3 2025.