EDITOR: | March 13th, 2013

The Pulse: The race for scandium; Focus on emerging graphite province; Peru silver and gold

| March 13, 2013 | No Comments

Pulse-Robin-BrombySumitomo is hardly going to shake up the scandium market – at least in the short term and considering that there is some question whether the word “market” can be applied to this rare earth element anyway.

As reported on ProEdgeMedia, Sumitomo Metal Mining Company is to build a trial plant to recover scandium at its Coral Bay Nickel operation on Palawan Island in the Philippines. Small quantities of the element are found in the sulphide containing the main output, nickel and cobalt.

However, this trial plant to going to produce only 10kg of scandium a month in 2014. Sumitomo is silent on what might be the output if the Japanese opt to scale up the scandium operation to commercial scale. Any upgrading would occur in 2015.

This is an important unknown: the world market at present is just 10 tonnes but that is just an estimate, as most of it comes from Russia, Ukraine and China )as well as from the U.S.). An indicator of just how small the market is, at least in the U.S., is contained on the Molycorp website. It says about 20kg of scandium is used a year (!) in the U.S. to produce high-density lights. Scandium iodide added to mercury vapour lamps produces a “highly efficient source resembling sunlight which is important for television cameras to be able to work indoors and in night-time. The radioactive isotope 46Sc is used as a tracing agent in crude oil refinery cracking processes.

Australia’s Metallica Minerals reckons that the world market could possibly grow as large as 100 tonnes a year, but the vicious cycle has first to be broken: at present, manufacturers don’t bother developing products utilising scandium because of the difficulty obtaining it. Metallica’s case is that someone has to start producing the element for its applications to multiply.

According to the newspaper Asahi Shimbun, Sumitomo has for some time been working at its Niihama research laboratory to develop a scandium recovery method. Niihama is the site of its nickel refinery, the only one in Japan that produces electrolytic nickel and cobalt.

Scandium was discovered in 1879 and Sumitomo lists its other uses as being to provide strength, heat resistance and corrosion resistance to aluminium, as an electrolyte used in solid oxide fuel cells, and as an electrolyte used in metal halide lamps and alkaline batteries.

The interesting point is that Sumitomo agrees with Metallica. Its announcement noted that to date scandium demand has been limited due to its modest volume of production and high cost. “But as supplies stabilize, growth is anticipated particularly in conjunction with its main applications as an aluminium additive and in solid oxide fuel cells”, the company said.

GRAPHITE: Chalk up another entrant to this sector. A small – it is capitalised at just A$4 million – Australian exploration hopeful BKM Management (BKM) has acquired a graphite project on Eyre Peninsula in South Australia. As has been remarked, this region is becoming known in Australia as the “Pilbara of graphite” in reference to the iron ore power of the region in Western Australia where Rio Tinto and BHP Billiton have their biggest mines. Eyre Peninsula has a history of graphite mining and is now being explored by several companies, BKM being the latest. The junior is acquiring 2,480 sq km of ground on which initial drilling has established the presence of graphite and, as the company says, “good recoveries of coarse flake and flake graphite”. The company plans a change of name to Oakdale Resources and will seek to raise A$6 million.

GOLD & SILVER, EMERGING MARKETS: Peru is an important player in some metals markets. It is the world’s second largest miner of silver and sixth largest of gold.

The Lima office of Canada’s Scotiabank has issued a report predicting Peru’s silver output should rise by 5% this year, and expanding further through to 2016.

The banks says investments in Peru’s mining sector rose 18%, or $8.55 billion last year, although much of that additional money came from base metal miners (Peru also being an important producer of copper, zinc and lead).




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