Metallica’s scandium oxide market is a market waiting to happen.
It’s not everyday you get to swing a golf club that’s been used in outer space. Recently, I was able to do just that when I had good fortunate to interview Dr. Nataliya Hearn. A truly fascinating and wildly accomplished scientist, professor and businesswoman, Dr. Hearn’s company, Element 21 Golf, was behind the 2006 outer-space, history-making “Golf Shot Around the World”, in which Flight Engineer Mikhail Tyurin set a new record for the longest golf drive in history, while tethered to the outside of the International Space Station. The six-iron Tyurin used was from Dr. Hearn’s golf company, which specializes in producing scandium golf clubs. Dr. Hearn is on the cutting edge of scandium being used in a wide variety of consumer applications, including golf clubs, baseball bats, bicycle frames, fishing rods, lacrosse sticks and smartphone cases.
Most people are unaware of how exciting scandium is, but the few who are, like Dr. Hearn, are very excited about it. And rightfully so. Scandium is the first member of the 17 rare-earth elements and was discovered in 1879 by Lars Fredrik Nilson, an analytical chemistry professor in Stockholm, Sweden. Historically, scandium’s primary application is in the production of aluminum alloys and solid oxide fuel cells (SOFCs); however, the biggest problem with incorporating scandium at much higher levels in manufacturing is its supply. There has never been a foreseeable long-term, reliable supply of scandium… until now. Australia’s Metallica Minerals Ltd. (ASX: MLM) is planning to change the world’s use of scandium by being first to market with a reliable supply of pure scandium oxide. From its 100% owned, flagship SCONI (which stands for scandium, cobalt, nickel) Phase 1 scandium project, Metallica Metals plans to produce 50 to 65 tonnes of 99.9% pure scandium oxide per year by late 2015.
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Often referred to as Element 21 (from its position on the periodic table), scandium has incredible enhancing applications in aluminum alloys. Scandium is typically used as scandium oxide, not scandium metal. Current global annual supply of scandium oxide is less than 10 tonnes. It has always been very difficult to secure a reliable supply of pure scandium oxide. Presently, China and Russia are the only sources for the commodity and the price is anywhere from $3,000 to $7,000 per kilogram. Current usage is restrained and unfulfilled demand is estimated to be as high as 100 tonnes per annum… and growing. A constrained market with no reliable supply presents an enormous opportunity for Metallica Minerals, which is forecasting a price of $2,000 per tonne for its scandium oxide.
As stated previously, there are two major markets presently for scandium oxide. The first is aluminum alloys. Anywhere aluminum alloys are applied, scandium oxide has an application. There is a tremendous unrealized market with aerospace application for next-generation lighter and stronger aircraft, coupled with other transport frames, such as cars and trains. Scandium oxide is the single-most potent element that can be added to aluminum to enhance its properties. Often referred to as a “spice metal”, just by adding 0.2 to 0.8% scandium to aluminum will dramatically improve:
- Strength – scandium makes all aluminum alloys significantly stronger.
- Weldability – in the welding process with scandium, welds become as strong as the aluminum alloy itself, due to the potent grain refining of scandium; scandium also inhibits “heat cracking” that is common due to the welding process.
- Corrosion Resistance – which one of the biggest problems in aerospace will no longer be an issue; the alloys will last much longer.
- Ease of manufacturing – scandium offers considerable cost savings and scandium- aluminum-magnesium alloys are very efficient for the next generation of aerospace and other transportation applications.
The second major market for scandium oxide is Solid Oxide Fuel Cells (SOFCs), which deliver reliable, efficient and cleaner energy by converting gas into electricity and usable heat, without combustion or moving parts. SOFCs work by creating an electrochemical reaction. Scandium plays a critical part in that process, as electrolytes containing scandium offer the best performance for SOFCs. In short, SOFCs are independent mini power stations that offer cleaner, greener and reliable cheap energy. There is enormous growth potential for SOFCs with the worldwide growth in gas distribution. It is important to note that Metallica Minerals already has an over 50% off-take agreement for its production of scandium oxide with Bloom Energy, a company that counts Apple, Google, ebay, Coca-Cola, Adobe and Walmart, among its numerous SOFC clients.
There are many more applications being researched for scandium and the possibilities are seemingly unlimited. Manufacturers have long been fully aware of the benefits of scandium; however, they could not commit to full-scale production of scandium-containing products due to the short supply. Now they can. Many of these innovative technologies are going to develop and grow over the next decade and, as a result, demand will be ever increasing.
Metallica Minerals knows that the scandium oxide market is a market waiting to happen. The company not only intends to create the market, but grow with it. By being the only major, reliable global scandium supplier, Metallica Minerals will benefit from the ongoing increased demand for scandium due to its efficacy, innovation and availability.
For more information on scandium or any other rare earth element, please visit InvestorIntel’s REEHandbook.com – your comprehensive source for everything you need to know about REEs!
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