Rio Tinto Group, with aid from the Quebec government, is investing a combined US$6-million to bring a new environmentally friendly scandium project into production, which will be the first steady North American source of the extremely pricey rare earth mineral.
Currently produced as a byproduct of mining other elements such as uranium and titanium, scandium is in tight supply worldwide. China and Russia dominate the market, leaving North American companies at the whim of unreliable and potentially hostile suppliers. The silvery white metal is used as an alloy to strengthen and lighten aluminum, and in fuel cells as a backup power source.
The Anglo-Australian mining giant plans to build a new scandium plant at its existing Sorel-Tracy metallurgical complex in southwestern Quebec. Starting in June, the facility will start producing about three tonnes of scandium oxide a year, or about 20 per cent of the current global supply, according to estimates by London-based Rio Tinto and the Quebec government. The plant will have a low environmental footprint since it will process waste materials from its existing titanium dioxide production, with the ore sourced from a mine in Havre-St-Pierre, Que.
Quebec is investing US$650,000 into the plant as part of an initiative announced in October that will see the province invest $90-million over five years to try to secure domestic sources of critical minerals used in industries such as defence, aerospace and high tech. The investment is also part of a wider North American push in this area. In 2019, Canada and the United States agreed to co-operate on a joint strategic and critical minerals strategy.
“This business has the potential to become a major scandium supplier outside China,” Jonatan Julien, Quebec’s Minister of Energy and Natural Resources, said in a statement.
Christopher Ecclestone, a mining strategist with Hallgarten & Co. in London, said while the figures provided by Quebec on the size of the scandium market are likely too low (he estimates the total global supply at 25 tonnes), a new supply source is badly needed in North America. China and Russia’s supply has been erratic, and it is often dependent more on the health of the primary metal being mined, such as titanium, rather than fundamentals of the scandium market.
“It’s going to provide an industrial quantity of scandium from a reliable Western company, so you’re not going to be over a barrel with the Chinese saying to [a company] ‘no more scandium for you,’” Mr. Ecclestone said.
The rare earths market has experienced significant supply shocks in the past. In 2010 and 2011 the prices of rare earth elements, including scandium, skyrocketed after China abruptly halted exports to Japan, where many rare earths are processed, owing to political tensions between the two countries.
Unlike other widely traded commodities such as gold or crude oil, scandium – as with many rare earth metals – has no widely traded futures contract and accurate pricing is hard to come by.
“Scandium is a very difficult metal to price because it is so thinly traded,” said Terence Bell, with Strategic Metal Investments Ltd.
He estimates that scandium oxide currently changes hands at about US$2,500 to US$3,000 a kilogram, down about 55 per cent compared with its peak in 2010 of US$6,000 to US$7,000/kg.
Scandium’s extremely high price compared with other industrial metals, such as copper or aluminum, has meant it has not been as widely adopted as it could be. The airline industry, for example, could potentially use scandium as an alloy to reduce the weight of planes, which would result in significant fuel savings. But there isn’t nearly enough global supply to meet the huge quantities that would be needed, and airlines are unlikely to take a gamble on a new material that is in such short supply, Mr. Bell said. This “chicken and egg” scenario is a major reason that he is skeptical of the chances of the scandium market growing exponentially from its current levels.
Stéphane Leblanc, managing director with Rio Tinto Iron and Titanium in Sorel-Tracy, said because of the company’s already sizable aluminum business it is well positioned to supply aluminum-scandium alloys to North American customers. When asked during an online news conference whether those customers could include aerospace companies such as Boeing, Mr. Leblanc declined to give specifics.
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Niall McGee