Why is everyone talking about scandium: Ryan Castilloux?
Ryan Castilloux, founding director and market research analyst at Adamas Intelligence, did more research on scandium. The investor asks: what is scandium? How is it used? What are its prospects? How can I make money on scandium? In an interview with the gold report, castiglio outlined the scandium market and the advanced projects of its listed companies. With $5 million or more in a tonne of scandium, Mr Castillo says the perception of scandium will never find a better buyer’s market.
The gold report: scandium may be the metal behind the most watched gold in the annual meeting of the Canadian association for exploration and development (PDAC) in March. Please give us an overview of the scandium market.
Ryan Castilloux: scandium was first found in Soviet aircraft and weapons during the cold war. Until the 1990 s, when a Canadian company have closed Ashurst Technology with a Ukrainian partners from Ukraine has a long history of iron uranium Zhovti Vody scandium harvest, only the commercial use of scandium. Ashurst has conceived a number of novel USES for scandium aluminum alloys, including baseball bats and bicycle frames. It developed patents for these applications and later licensed them to Easton Sports, now Performance Group Sports Ltd. (PSG: TSX).
ASHLEY hurst mining operations is very short, but the commercial production of scandium continues, many other companies to follow suit, also including the golf clubs, ski poles and gun rack using scandium in aluminum alloy. Since then, scandium also begin to enter electrolyte material for sofc, the application of scandium demand worldwide occupied the main position, and will continue for the foreseeable future.
Scandium is one of the most important elements in the periodic table. The value of a few tons of scandium can buy almost any emerging scandium producer on the market. Those with billions or even hundreds of billions of dollars in underground scandium will be worth less than $10 million ($10 million). Anyone who is good for scandium will not find a better buyer’s market.
TGR: in the rare earth market, China is the gorilla in the room. What is China’s role in the scandium market?
RC: China does not play an important role in the case of scandium. Russia is really a pioneer of scandium production and end-user development. In the 1950s, Soviet scientists first recognized the excellent performance of the metal and how it increased its aluminum content. The small scandium concentration, usually only 0.2 percent scandium, and aluminum alloy, enables the aluminum to be effectively welded to another similar scandium aluminum alloy, so you don’t need heavy hardware to connect. The key to this situation is that scandium can inhibit the regeneration of grain in the alloy during the welding process and maintain the strength and integrity of the alloy at the weld.
From 1960 to 1990, Russia, Ukraine, kazakhstan and uzbekistan produced most of the world’s scandium concentrates and other scandium compounds. During this period, the United States and Australia produced a small amount of scandium as a byproduct of the processing of fluorite, uranium and tungsten. In the 1980 s, China began from the tailings and other existing production flow extracting scandium, but as far as I know, in the next twenty years or longer period of time, never yield each year more than 25 to 30 kilograms (25 to 30 kilograms). From 1990 to the present, scandium mainly comes from the tailings of the former Soviet states and the mother alloys produced before, most of which were accumulated during the cold war.
TGR: what is the annual market volume of scandium worldwide?
RC: estimates vary widely. The low-end estimate is to produce 5 tons of scandium per year, or harvest and consume from inventory. The high-end estimate is 15 tons. This is a very small market, but with explosive potential.
TGR: why is the market so small?
RC: the reason is twofold. Lack of consistent supply is a problem, but the other is price. Depending on the level of purity and whether it is scandium or scandium metal, you may see $5 to $10M per tonne. This obviously eliminates the use of it in many cost-sensitive applications. End users have been waiting for a continuous increase in supply and lower prices.
TGR: so you won’t get a scandium chassis on your Toyota corolla.
RC: not this year, but cars are a huge potential use for scandium, perhaps the biggest. It was a longer play. Along with the direction of things, we can imagine the future there will be a 3 d print engine unit, the engine unit and no heavy hardware, but this is another topic, or another ten years.
TGR: what is the latest news about some “major” scandium producers?
RC: there are only a few advanced major scandium producers in the world. All of these companies have projects in Australia, all of which are geographically similar, because scandium is carried out in red soil. Scandium international mining co., LTD. (SCY: TSX) Nyngan is a preliminary economic assessment (PEA) phase project with a resource volume of 12 million tons (12 million tons), with a rating of scandium of 401 (PPM) per million. Nyngan’s PEA recommends that the mine live for 20 years, producing about 36,000 kilograms of scandium each year, with a cash cost of 707 Australian dollars per kilogram, excluding the maintenance of capital and usage fees, which runs from 75,000 tons per year. This is a modest initial production scale, and as demand grows, there is plenty of room. The lean pre-production capital requirements for the project are $86 million. In march, Scandium Mining signed a memorandum of understanding with Canadian special alloy manufacturer ALCERECO Inc. As part of the deal, Scandium Mining will provide ALCERECO with an annual supply of 7,500 kilograms of Scandium. The two companies also plan to jointly develop and sell scandium alloys.
TGR: tell us another one.
RC: Platina resources limited (PGM: ASX) the Owendale project in new south wales, Australia is also in the PEA phase. Owendale has 23.6 million tons of mineral resources and is classified as 589ppm of scandium oxide. PEA suggest mine life expectancy of 70 years, each year 30000 kilograms of scandium oxide, cash costs $598 / kg, not including from 50000 tons of mill to maintain capital and any applicable royalties. This is also a modest mining operation, with a lot of space to expand on demand. The project will require a total of $73.5 million in pre-production capital. In July 2014, Platina announced a non-binding agreement with Chinese manufacturer Honfine to supply 15 tons of scandium per year from Owendale’s planned production. A month later, pilates announced a similar agreement with China hunan Oriental scandium co., LTD.
Metallica Minerals Ltd. (MLM: ASX) the SCONI project in new Queensland, Australia (abbreviated for scandium, cobalt and nickel) is the most advanced scandium project in the industry. SCONI has a 57-million-ton resource rating of 299 PPM of scandium. The 2013 pre-feasibility study of the project proposed 20 years of mine life, producing about 51,000 kilograms of scandium each year, with a cash cost of about 1,120 Australian dollars per kilogram. The project needs a $240 million in pre-production funding. Metallica announced late in 2012 that it had agreed a deal with Bloom Energy, a maker of solid-oxide fuel cells, which will provide the company with 30,000 to 60,000 KGS of sc per year for SCONI. Metallica also announced a strategic alliance with Dutch alloy manufacturer KBM Affilips BV.
The last major scandium project that people should be aware of is in Australia’s Clean TeQ Holdings Ltd. (CLQ: ASX) Syerston project. It’s an early project, but it’s making a lot of progress. In November 2014, Clean TeQ announced that it would buy the project from Ivanhoe Mines Ltd. (IVN: TSX). Two months later, Clean TeQ released the first estimate of the amount of 635 PPM for the first mineral resource. In march, the company announced a partnership agreement with Airbus’s APWorks, and later announced a new cooperation agreement with the alloy manufacturer KBM Affilips. The project quickly attracted the attention of major end users and became one of its biggest shareholders, “rock star” Robert Friedland.
TGR: who is the emerging enterprise in scandium production?
RC: some of the world’s largest scandium mineral resources are the resources that scandium is considered a by-product. DNI Metals Inc. (DNI: tsx.v) An example of the DG7: FSE is the Buckton project in the northeast of alberta. It contains an exciting 80 kiloton in situ scandium. The current price of scandium is between $2,000 and $5,000 per kilogram, and the value of Buckton in situ is between $16 billion and $40 billion.
Most importantly, the adjoining barton south mineral resources, which is owned by the DNI, also contains 10,900 tons of in-situ oxidation scandium. Although Buckton Scandium grade is lower than the Clean TeQ, Platina, Scandium emerging main producers, such as Mining, and Metallica but Buckton resources also contains a number of other valuable metals, including rare earth elements, gallium and uranium and base metal, this would support the level of Scandium. In 2014, baxton PEA suggested producing more than 200,000 kilograms of scandium and a series of by-products.
Orbite Aluminae Inc. (ORT: TSX) EORBF: OTXQX) Grande- Vallee project and Magris Resources Inc. ‘s Niobec project are two other multi-metal Resources with a large number of in-place scandium. Both contain about 30,000 tons of in situ scandium. In Orbite’s 2012 grant-vallee project PEA, the company recommends a yearly production of about 48,000 kilograms of scandium.
Galileo resources corporation (GLR: AIM) Glenover project in South Africa is a PEA stage project, with ten million tons of resources classification 180 PPM of scandium oxide, which is very high for a potential secondary manufacturers. Interestingly, most of Glenover’s scandium resources, about 540,000 kilograms of scandium, are running on the surface, meaning that the company will initially bear zero mining costs.
Pele Mountain Resources Inc. (GEM: tsx.v) is another potential secondary producer at the Eco Ridge PEA stage in Ontario. Pele’s historic Eco Ridge mine contains about 500 tons of scandium. The company plans to produce about 11,000 kilograms of scandium per year in 2013, as a byproduct of primary rare earth elements and uranium production.
TGR: some of these companies don’t produce scandium, because not all companies can raise the necessary funds. But even if only one or two production capacity reaches production, what happens to scandium prices?
RC: with one or more new sources of supply, 99.9% to 99.99% (3 n – 4 n) pure scandium oxide prices could fall to $1500-2500 / kg range, depending on the speed of the new supplier to step up production and the market quickly absorbed it. The number of new producers on the market will also have an impact on the new base price of scandium, and the identity of the new producers will be affected. If we look at the cost of scandium producers in emerging curve, we can see that, apart from some exceptions, the market supply will be hard for $1000 / kg scandium oxide or lower price. Although we see that some projects have a cash cost that is well below the $1,000 per kilogram mark, remember that this cash cost does not include the maintenance of capital and any applicable royalties,
In the long-term aud/usd and cad/dollar exchange rate under the condition of 0.90 and 0.90, according to us from every project, deduce the prediction of their respective technical report emerging primary producers of scandium oxide average cash cost of $728 / kg scandium oxide. When considering the cost of capital, maintaining capital cost and using time and time, the price of scandium floor is strongly supported above $1,000 / kg. On the contrary, however, the average cash cost of newly used manufacturers is negative $1,200 per kilogram of scandium and credit.
Interestingly, the scandium cash cost forecast of the Orbite Aluminae Grande Vallee project is significantly negative, as the Orbite plan produces a sufficient number of non-scandium projects. This means that if Grande Vallee goes into production, Orbite could produce serious pricing power for competitors in the scandium market. Orbite may be the wildcard of the scandium space.
TGR: what new scandium applications are expected to drive demand growth over the next five to 10 years?
RC: the current level of demand growth will continue to be supported by the established new end-use of sc aluminum (including baseball bat, bicycle frame, pistol, etc.). However, real demand growth over the next five years will be driven by the use of scandium in solid oxide fuel cells. According to data from www.fuelcelltoday.com, global solid oxide fuelcell shipments grew by nearly 50 percent a year from 2010 to 2014. At this rate, the demand for scandium of solid oxide fuel cells will increase by an order of magnitude by 2020.
In the range of 5-10 years, the use of scandium aluminum alloy in aerospace applications will also lead to a large number of new demand growth. Each year, about 1,200 aircraft are produced, each weighing about 75,000 kilograms and about 50,000 kilograms of aluminum. Airlines continue to demand larger planes, while larger ones need to lose weight without compromising safety. One possible way to do this would be to use the welded scandium – aluminum fuselage panel instead of the traditional aluminum alloy panel, which needs to be maintained with thousands of heavy fasteners. Every time a plane is lowered, it saves 800 to 1,000 gallons of fuel over the entire life cycle, so there is a clear fiscal incentive to do so.