Diatreme Resources (ASX: DRX) has finalised a non-binding agreement with Japanese trading and investment company Mitsui to evaluate the potential offtake of products from its North Queensland silica sand projects.

The agreement will enable the companies to engage in further negotiations concerning the potential sale and purchase of silica sand products produced by Diatreme.

It will remain in effect until 1 November 2025 and will be subject to automatic renewal unless either company advises otherwise.

Vote of confidence

Diatreme chief executive officer Neil McIntyre said Mitsui’s support was a vote of confidence in the future of the company’s silica sand projects.

“Having the support of a blue-chip company is hugely encouraging as we work towards developing our low-iron, high-purity silica projects to help power the global solar energy boom,” he said.

“We look forward to engaging closely with Mitsui on future offtake and business opportunities with the goal of securing mutually beneficial agreements which ensure the sustainable development of our projects.”

Sustainability commitment

General manager of Mitsui’s chlor-alkali division, Yuichi Fujii, welcomed the agreement.

“Diatreme is a company with a strong commitment to community engagement, health and safety and sustainable development,” he said.

“The company’s silica sand projects are attractively located in proximity to fast-growing Asian markets and its ability to deliver a low-iron, high-purity product positions it well to benefit from the continuing solar energy boom.”

Mr Fujii said Mitsui would utilise its global network and industry know-how to help generate maximum value from the critical mineral, which is key to global decarbonisation.

Solar power demand

Solar power is driving renewables growth worldwide, with industry research showing that photovoltaic (PV) technology is set to account for 80% of new renewable capacity added globally through to 2030.

Mr McIntyre said the growth in demand had highlighted the importance of new silica sand projects capable of reliably supplying the industry.

“Our North Queensland projects are becoming increasingly strategic assets and have been recognised by the Queensland government as a generator of key critical minerals,” he said.

Chinese offtake deal

The Mitsui agreement follows a non-binding offtake deal signed in July 2023 with China’s Flat Glass Group, one of the world’s largest manufacturers of PV-grade glass used in solar panel manufacturing.

Diatreme and Flat Glass agreed to exchange bulk PV-grade silica samples, technical and project information to facilitate potential progression to binding offtake arrangements.

Flat Glass also agreed to investigate the establishment of onshore PV glass production in Queensland to keep up with surging demand from the solar power industry.