(Yicai) Aug. 5 -- Shares in Kuncai Material Technology gained today before investors cashed in after the Chinese supplier of effect pigments, which are synthetic pigments characterized by high luster and bright colors, said it will link arms with Hong Kong’s International Resources to build a mineral processing facility for South Africa’s Mapochs mine to ensure its own raw material supply.

Kuncai’s share price [SHA: 603826] closed down 4.17 percent at CNY27.32 (USD3.82) today in Shanghai. Earlier in the day it climbed 2.5 percent to CNY29.24.

Kuncai is linking arms with International Resources to construct an ore processing plant at the Mapochs mine, which is the largest vanadium mine in the world with the highest quality of vanadium ore, the Fuqing-based firm said yesterday. The Mpumalanga-based mine was acquired by International Resources in September 2017 through a global public auction.

The pair will set up a joint venture to run the factory, which should produce 50 million tons of high-grade iron ore, 5 million tons of high-grade titanium concentrate and 100,000 tons of vanadium pentoxide a year by 2030, it added. No mention of the investment amount was given, nor the shareholding ratios of the two partners.

The tie-up will extend Kuncai’s business remit into the upstream raw materials sector and help it become more competitive, said Kuncai, which supplies effect pigments to some of the biggest automobile coating manufacturers, well-known international cosmetic makers and other coating companies in the world.

Most of the minerals produced will then be exported to China through the Port of Zhangzhou, which has two deepwater harbors on the coast of southeastern Fujian province, close to Kuncai’s manufacturing base.

To accommodate the project, the Zhangzhou government will increase the port’s throughput capacity to handle 10 million tons of minerals by 2025 and 60 million tons by 2030, the company said. At present thetwo harbors along the city’s deep water bay area have a combined cargo throughput capacity of 70 million tons.

The convenient transportation links will help Kuncai bring more minerals into the country.

Kuncai’s overseas revenue accounted for 35 percent of the company’s revenue last year at CNY292 million (USD40.8 million), according to its latest annual earnings report.

Editor: Kim Taylor