Making scandium mainstream in the very near future
Light weighting of vehicles using aluminium-scandium alloys can reduce costs, increasing range, and reduce emissions
More than ever before, new innovations are reshaping the automotive industry. One trend that is gaining in importance is “light weighting”. That is, making vehicles lighter, and hence more fuel efficient. Even tiny reductions in aircraft weight can lead to significant fuel cost reductions.
By using composite materials and alloys that are strong, but lighter than steel, companies are able to manufacture vehicles that require less fuel and create fewer emissions to meet tightening emission standards. China and Europe are tightening their emission standards in 2020, so this is of imminent concern for auto manufacturers. In the case of electric vehicles, a lighter vehicle offers a greater range. By using a lighter vehicle a smaller battery is needed, and the vehicle cost is reduced.
Scandium (Sc), combined with aluminium (Al), is an effective way of light weighting vehicles. It can be added to aluminium to make alloys lighter, stronger and more malleable. This can dramatically reduce the weight of parts for not only cars, but also aircraft and ships, helping deliver savings on fuel costs. Right now a lack of scandium supply, and hence an expensive price, is holding back the industry. Scandium supply is a mere <50 tons pa.
Scandium is mostly used in aerospace and high end sports equipment. It has enormous potential to reduce fuel costs in the aviation sector as Al-Sc alloys may reduce aircraft weights by 15%-20%. As the price falls the use could spread into the auto sector, initially into high end electric vehicles.
The chart below highlights the potential enormous growth for the scandium market should lower price (US$2,000/kg) scandium oxide be available. The potential growth forecast below is a 6 fold increase in the scandium market from 2018 to 2025.
Source: Kaiser Research
Scandium International Mining Corp. (TSX: SCY) is a junior scandium developer. The Company has a 100% interest in the advanced stage Nyngan Scandium Project, located in New South Wales, Australia. Completing a DFS for the Project in May 2016 they are now focused on advancing the Nyngan Scandium Project to construction, with the goal of being the first company to achieve production from a primary scandium mine.
The 2016 DFS for the Nyngan Scandium Project
Looking at the DFS results below a key is that the unit cash cost is just US$557/kg Sc oxide. This means the project is very economic (after tax NPV8% is US$225 million) at US$2,000/kg Sc oxide. Also at this price the scandium market can grow strongly if new supply becomes available.
The Nyngan operation is forecast to produce around 40 tonnes of scandium oxide per annum. Some may say this would flood the market, but the reality is the market can absorb a lot more scandium if prices were lower (US$2,000/kg Sc oxide).
The Company has completed all required governmental approvals required for construction. The Company also owns a 100% interest in the Honeybugle Scandium property, an exploration property adjacent to the Nyngan Scandium Project.
The absence of a reasonably priced and reliable source of scandium has limited commercial uptake of scandium. Despite this low level of use, scandium offers significant benefits. Both the aircraft and automotive industries discovered in the 1970’s that if they alloyed aluminium with scandium it could produce a stronger, more corrosion resistant material. The bonus was the alloy was strong enough to be welded rather than riveted, resulting in lighter, more fuel-efficient crafts that are cheaper to produce and run.
At current prices scandium remains too expensive for anything more than use in the aerospace industry or sports equipment; however, with increased production comes reduced prices. With Scandium International’s projected annual production alongside other Australian projects like Clean TeQ’s Sunrise Project we could see scandium become mainstream in the very near future.
Scandium International Mining Corp. will be attending the 2020 PDAC Convention March 1-4, 2020 at the Metro Toronto Convention Centre, Toronto, Canada. Note that InvestorIntel will be one of the PDAC media sponsors.
Matthew Bohlsen is a Senior Editor for InvestorIntel.com. With a Graduate Diploma in Applied Finance and Investment, and a Graduate Diploma in Financial Planning. He ... <Read more about Matthew Bohlsen>