Zeotech Signs Major Deal with Jiangsu MSI for Kaolin from Toondoon Project

Zeotech (ASX: ZEO) has signed a binding term sheet with Jiangsu Mineral Sources International Trading Co (MSI) for the sale of direct shipping ore (DSO) kaolin from its Toondoon project in Queensland.

The agreement provides MSI with exclusive rights for low-iron kaolin DSO and non-exclusive rights for pink cosmetic-grade kaolin DSO.

Zeotech expects the deal to generate early cash flow opportunities while supporting the staged development of the company’s AusPozz metakaolin project.

MSI Agreement Anchors Early Sales Strategy

The five-year term sheet sets out minimum total commitments for Zeotech’s low-iron (800,000 tonnes), pink cosmetic-grade (150,000t) and bauxitic clay (1.5Mt) DSO products.

MSI will use its international trading channels to target high-value export markets, with a focus on Asia’s growing ceramics and cosmetics sectors.

Negotiations are now progressing toward a definitive offtake agreement, which will formalise pricing and delivery schedules ahead of first production.

Zeotech chief executive officer James Marsh said MSI’s reach offered a clear path to market for premium Toondoon kaolin while positioning the company to scale production in line with demand.

AusPozz Feasibility Highlights Project Economics

Zeotech completed a preliminary feasibility study (PFS) during the June quarter for its AusPozz Project, located alongside the Toondoon resource.

The PFS confirmed the technical viability of producing high-reactivity metakaolin for use as a supplementary cementitious material in low-carbon concrete.

Key outcomes included an after-tax net present value of $406 million, an internal rate of return of 42% and a payback period of 2.1 years based on a 20-year mine life.

Annual EBITDA was forecast to average $1.6 billion over the life of the operation, supported by a measured and indicated kaolin resource of 10.87 million tonnes.

Concrete Trials Strengthen Commercial Case

Independent testing demonstrated AusPozz can replace up to 40% of conventional cement in concrete mixes without compromising strength or durability.

Laboratory work also confirmed performance gains in early strength development, a key metric for commercial acceptance.

Zeotech plans to start a definitive feasibility study (DFS) in the September quarter, with a final investment decision targeted for early 2026.

The company said the DFS will refine process design and operating costs while incorporating feedback from industry partners.

Methane Control Program Delivers Breakthrough

Zeotech and Griffith University also recently completed their Methane Control Program, which developed a zeolite-based biofilter to mitigate landfill emissions.

Laboratory testing showed the system reduced methane by more than 90%, a result the company says could have significant environmental and regulatory benefits.

The NSW Environmental Protection Authority has called for expressions of interest from landfill operators to host pilot installations, with two responses received to date.

Field trials are expected to commence in the March 2026 quarter, marking the program’s transition from laboratory to operational deployment.