WA Kaolin Accelerates Production and Sales Amid Rising China Demand

Operational Scale-Up and Production Efficiency

WA Kaolin Limited (ASX: WAK) has reported a significant operational uplift in its March 2025 quarter, driven by the commissioning of two new classifiers at its Wickepin plant. Each classifier is now producing at 20 tonnes per hour (tph), including 5 tph of a new technical grade kaolin product branded as Kaosil. This enhanced capacity and product diversification position the company well to meet increasing demand, particularly for finer and engineered ceramics applications.

The company has transitioned to a 24-hour, four-day production schedule on one classifier, with plans to expand shifts as demand dictates. Optimisation efforts are underway to fine-tune plant systems feeding the classifiers, aiming to exceed the plant’s 25 tph nameplate capacity once both classifiers are fully operational and integrated by July.

Robust Sales Growth and Expanding Order Book

Sales for the quarter reached 5,525 tonnes, generating revenue of approximately A$1.24 million at an average price of A$224 per tonne. Forward orders have surged to 16,418 tonnes, with monthly commitments growing steadily from April through July and beyond. This surge is largely attributed to accelerating customer interest in China, where WA Kaolin has secured orders from two new customers and is advancing further negotiations.

However, the company faced logistical challenges in April due to container shipping constraints, which temporarily capped sales revenue. WA Kaolin has since secured additional shipping capacity for May and subsequent months, preparing for record shipment volumes.

Financial Position and Capital Raising

WA Kaolin successfully completed a $7 million accelerated non-renounceable entitlement offer (ANREO) during the quarter, reflecting strong shareholder support. The company ended March 2025 with a healthy cash balance of A$6.15 million, providing a solid financial foundation for ongoing operational improvements and mining campaigns ahead of the winter wet season.

Production costs for the quarter were approximately A$0.77 million, primarily driven by gas, diesel, and freight expenses. Related party payments amounted to $161,208, covering directors’ fees, consultancy, and contracted services, all disclosed transparently in the quarterly report.

Innovation and Market Development

Research and development efforts have yielded two new engineered clay grades, EC-SAN for sanitary ware and EC-PLA for tableware, now launched into the ceramics market with provisional specifications. R&D is also advancing the approval of finer kaolin grades for paint and paper applications, while initial testing for geopolymer concrete (‘green cement’) applications shows promising results in collaboration with Curtin University and consulting partners.

These innovations not only diversify WA Kaolin’s product portfolio but also open new market segments, aligning with global trends toward sustainable materials.

Outlook and Operational Readiness

The company is actively preparing for increased production demands, with mining campaigns underway to secure sufficient ore ahead of seasonal rains. Contractors have been engaged to support mining activities, reflecting the urgency to maintain supply continuity. Safety remains a priority, with WA Kaolin reporting an accident-free quarter and ongoing efforts to improve working conditions.

With a robust order book, expanding product range, and solid financial footing, WA Kaolin is well positioned to capitalize on growing domestic and international demand, particularly from China, while continuing to enhance operational efficiencies.