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| Australia has substantial ilmenite and rutile resources, accounting for 21 per cent and 36 per cent, respectively, of world reserves in 2006 (USGS 2007; based on TiO2 content). Ilmenite is used to produce synthetic rutile, and rutile and synthetic rutile are used to produce titanium tetrachloride (TiCl4), which is a key input in the titanium metal industry. Australia is a leading producer of ilmenite (20 per cent of world production in 2006), rutile (44 per cent) and synthetic rutile (86 per cent) (TZMI 2007). In 2006-07, Australia’s exports of rutile, ilmenite and synthetic rutile were valued at around $0.7 billion, representing less than 1 per cent of Australia’s total mineral resources exports (ABARE 2008). In 2001, the Australian Government examined the potential to establish an Australian titanium metal industry in a study undertaken by the Department of Industry, Science and Resources and subsequently through the Light Metals Action Agenda (DISR 2001a,b). The key finding from these assessments was that the development of a titanium metal industry in Australia based on the existing Kroll process was not a viable option. There were also concerns about limited future growth potential in the world titanium market. Two major developments have occurred since 2001. Following the Light Metals Action Agenda process, CSIRO established the ‘light metals flagship’ and has since developed the TiRO process to produce titanium powder (CSIRO 2006). In addition, there has been strong growth in the world titanium market. The objective in this study is to examine the role of government in supporting the TiRO/CSIRO R&D project and the potential development of a titanium metal industry in Australia. Investment in a pilot plant, likely to be located in Western Australia in close proximity to major resource deposits and related processing facilities, is the next stage in the further development of the TiRO/CSIRO technology. The approach taken in this study is to present relevant background information on technology and market developments (chapters 2–4) and to undertake an economic assessment of the role of government and technological change in the titanium market (chapters 5, 6). It is beyond the scope of this study to examine the impact of any future possible greenhouse gas policy response on the world titanium market, although some brief comments on the general nature of these impacts are provided. |