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Plans to increase its share of the world’s rutile market from 30% to 50% have taken Titanium Resources (TXR:AIM) into Cameroon as it searches for acquisition opportunities. The company wants to buy projects that will produce at least 100,000 tonnes of rutile per year.

In the short term, chief executive Len Comerford says Titanium Resources could lose market share as rival mines go into production. ‘There are lots of 25,000 tonne companies coming on stream, which will dilute our market position but we will find a way to regain and improve our ranking,’ he comments.

Titanium Resources is set to double rutile production this year to 240,000 tonnes. It has already pre-sold all of 2008 production apart from 20,000 tonnes to meet spot market demand.

Rutile is used to make titanium metal, welding rods and as pigment for paints, paper and plastics. The company mainly sells to North and South America and Europe but demand is growing from Asia.

It was approached last year by several Chinese companies wanting annual offtake agreements for 140,000 tonnes of rutile. These discussions continue and are thought to include Jinchuan, the Chinese mining giant which took a 20% stake in mineral sands group Tiomin last year to gain access to the junior’s resources in Kenya. A set back has occurred as the project is under force majeure because of environmental issues.

Titanium Resources has a deposit north of its Sierra Rutile mine in Sierra Leone that could meet the Chinese groups’ needs. Located in the Sembehun area, the deposit has a 12-year mine life but is currently not included in the group's exploration programme. Comerford says there is an opportunity to develop this as a standalone mine if it can secure ‘an appropriate investment’.

The company should update on exploration in the next week or so as it works towards extending the mine life of Sierra Rutile and developing the Turners’ Peninsular concession. The latter will require substantial drilling to make it compliant with JORC, the Western standard for calculating resource estimates. Extra bauxite deposits have been identified at Sierra Minerals, Titanium Resources’ project operated under contract by PW Mining.

Following power problems in 2007, Titanium Resources raised $35 million to build a new power plant. The facility will run off heavy fuel oil, which is half the price of diesel. It is in talks for the Sierra Leone government to own the facility – as they are seeking infrastructure investments – in exchange for a long-term power offtake agreement.

A third dredge will be added to the Sierra Rutile project this summer, adding 40,000 tonnes per year to its production capacity.