Why Scandium Could Be a Huge Opportunity | HOSTEL


Scandium is a critical metal that is as strong as titanium, as light as aluminum and as hard as ceramic.

While it is more abundant than lead, mercury and all the precious metals, there are no pure mines that produce scandium. The rare earth element is often a by-product, resulting from the refining of other metals, including uranium.

Pure scandium rarely concentrates at higher grades alongside other metals, making commercially usable scandium deposits very rare. Moreover, even when scandium is at high levels, it can be difficult to process, leading to very few stable sources of this critical metal.

Unsurprisingly, this means that there has been very little adoption of scandium in commercial applications. However, as John Kaiser of Kaiser Research has pointed out repeatedly over the past few years, as well as more recently, that doesn’t mean there hasn’t been research on how scandium could be used. in the future.

“Hundreds of applications (have been) filed, many of which were for alloys with aluminum,” he said in an interview with Investing News Network. “This dark metal will go ballistic in the next few years.”

Kaiser made this statement a few years ago, and the scandium has yet to become ballistic. But he still has hope for metal, and he could still do his time in the sun.

Below is an overview of the scandium market. Topics covered include current production, newcomers to space, and the potentially bright future of the metal.

Current production of scandium

The first known large-scale production of scandium was associated with Russian military programs. Details are lost in the story, but the Russians are said to have alloyed metal with aluminum to make lightweight MIG combat parts. Mining at these historic Russian production sites has ceased, but stocks of scandium oxide and scandium master alloy remain in Russia. These stocks are said to be declining, but continue to be offered for sale in the market.

Today, most scandium is produced as a by-product during the processing of other minerals, such as uranium or rare earths, or recovered from previously processed tailings. As a result, the supply of scandium can be affected by the dynamics of supply and demand for the metals with which it is produced. This can make the already difficult to follow market dynamics of the metal even more difficult to understand.

According to the US Geological Survey, scandium-producing countries include China, where it is a by-product of iron ore, rare earths, titanium and zirconium; and the Philippines, where it is a by-product of nickel. Scandium is also produced as a by-product of uranium in Russia, Ukraine and Kazakhstan.

Greater US production could also be on the horizon after a legislative push that encourages the Defense Department to look at potential uses for the metal. Environmental and construction permits have been approved for NioCorp’s Elk Creek polymetallic project (TSX: NB, OTCQX: NIOBF) with probable reserves estimated at 36 million tonnes containing 65.7 parts per million scandium.

Scandium resources have been identified in mineral-rich areas around the world, including Australia, where a number of junior mining companies are working to develop scandium deposits in New South Wales. These include Scandium International Mining (TSX: SCY), which controls the Nyngan project; Clean TeQ Holdings (ASX: CLQ, OTCQX: CTEQF), which owns the Sunrise project; and Platina Resources (ASX: PGM, OTC Pink: PTNUF), which is working on the Owendale project.

Scandium price and trading

The US Geological Survey states that the global scandium market is “small compared to most other metals.” This is illustrated by global production and consumption, which is only estimated at 15-20 metric tons per year.

The US Department of Commerce and the International Trade Commission do not have specific data on trade in the metal. Additionally, there is no formal buy / sell market today – scandium is not traded on an exchange and there are no terminal or futures markets.

Instead, the metal is traded between private parties, mostly at undisclosed prices and amounts. Therefore, it is difficult to understand the precise volume of production and the cost of scandium, and independent estimates are more relevant.

Production estimates are based on the activity and interest levels of traders, as well as the knowledge that some traders are selling the critical metal from very small trades.

The estimates also include consumers expected to source scandium through small, controlled salvage operations, but do not take into account the amounts of the metal in the main alloy currently sold from Russian stocks.

The opportunity of scandium

Analysts expect the global scandium market to grow at a compound annual growth rate of greater than 11% between 2020 and 2025. “The main growth factors of the market studied are the acceleration in the use of batteries. solid oxide fuel and the growing demand for aluminum-scandium alloys, ”notes ReportLinker.

Despite the known and stable lack of supply, scientists and engineers have worked hard to develop new products incorporating the metal. The potential of Scandium in high tech applications is well documented. Highlights of metal properties include:

  • It can be used in creating stronger, corrosion resistant, heat tolerant, weldable aluminum alloys for light aircraft and automobiles.
  • Its exceptional electrical properties and heat resistance are valuable for solid oxide fuel cells.
  • It has unique optical properties for high intensity lamps.

A recent Kaiser Research report on scandium details the wide variety of end-uses for scandium today and in the future, as well as where the potential supply comes from to meet that demand.

Potential supply and demand for scandium oxide.

Kaiser Research

As Kaiser explained, “There is a huge latent demand for scandium should it ever become available on a primary and scalable basis. “

In other words, the only barrier to accessing the demand for a new family of high performance aluminum materials and energy / lighting products is the lack of commercially viable larger scale scandium production. Interestingly, Kaiser’s work highlights two important developments in the scandium market that may “have the potential to kickstart a growth in demand for scandium over the next decade towards a market of 1,000 (tonnes per year). worth US $ 2 billion ”.

On the one hand, Rio Tinto (NYSE: RIO, ASX: RIO, LSE: RIO) announced in 2020 that it has developed a scandium recovery route at its plant in Sorel-Tracy, Quebec, where it produces slag of titanium from the iron of Lake Tio. -deposit of titanium. In mid-2021, Rio Tinto began operating on a commercial scale at its new scandium oxide production plant.

“Rio Tinto’s development is a game-changer for the scandium industry,” said Kaiser, who believes that increasing scandium production could help boost the industry.

Second, Scandium International Mining filed a patent application in late 2019 protecting a method of recovering scandium and other metals from waste streams from copper oxide leaching operations. In mid-2020, the company announced that copper raffinate tests showed that its patent-pending process could recover enough scandium to match the supply added to the market by Rio Tinto.

“The conditions are finally in place for scandium to become the ideal lightening solution for aluminum,” Kaiser said in his note to investors.

This is an updated version of an article originally published by Investing News Network in 2014.

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Disclosure of Securities: I, Melissa Pistilli, do not hold any direct investment interest in any of the companies mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or completeness of any information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investment News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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