Vital vanadium’s very short, so niobium’s needed instead

The specialty metal vanadium has attracted attention in commodity and investment markets over the past year as strong demand widens the supply gap. Prices for its iron alloy, ferrovanadium (FeV), have increased 540% since early 2017.

FeV is a hardening, strengthening and anti-corrosive additive for steels. Minor (typically less than 0.1% weight) additions of FeV enable the construction of robust, safe structures with less steel and therefore lower costs. This application accounts for around 90% of vanadium demand. Other applications of vanadium include chemical catalysts, aerospace alloys and batteries.

Vanadium supply depends mostly on its extraction from steel slags, with only 18% coming from few primary ores. 77% of vanadium supply (raw material) is controlled by China, Russia and South Africa.

Vanadium producers can’t meet growing demand

China has dominated the vanadium market, producing 55% of global supply, extracted mostly from titano-magnetite blast-furnace slags from steel production, but also from stone coal (anthracite). However, the Chinese government’s new, tougher limits on waste streams and environmental pollution are reducing vanadium production from these sources.

Vanitec estimates that last year, global vanadium demand (88,600 tonnes) exceeded production by 10%. Vanadium demand is forecast to increase by 50% to 130,000 tpa by 2025.

One driver for increasing demand is China’s introduction of higher strength standards for rebar (steel bars or mesh used to reinforce concrete) to enhance resistance to earthquakes. If all Chinese rebar production moves to the new standards, vanadium demand for this purpose will increase to 42,000t.

Other applications for vanadium promise to stimulate further demand, including redox flow batteries that use vanadium electrolytes and enable wider use of renewable power generation from wind and solar energy.

Clearly, new vanadium sources and/or an alternative are urgently needed.

Niobium to the rescue

Niobium – vanadium’s downstairs-neighbour on the periodic table – has similar valuable properties. Niobium can’t completely replace vanadium but is an important alternative. Historically, vanadium prices have lagged niobium prices, but are now 300% higher – a strong economic incentive for substitution.

Spot ferroniobium (FeNb) prices have increased by almost 50% since early 2017 and could increase further as steel companies substitute it for FeV. Specific consumption of niobium in China is low, so prospects for greater demand and further price gains are good.

In addition, niobium is critical for advanced alloys used in aerospace. For example, it is the main (89%) constituent in the C-103 alloy employed in re-usable rocket nozzles by Space X and NASA.

But niobium suppliers are few and far between: world-leader CBMM in Brazil produces 85% of global supply and IAMGOLD in Canada follows, producing around 9%. No new mines have been developed for over 40 years. To fill the vanadium supply gap, this situation needs to change, fast.

In 2010, WikiLeaks released a US government list of key foreign resources vital to US interests, on which niobium appeared multiple times. The strategic importance of niobium is witnessed by the following investments by countries and companies in recent years:

  • In March 2011, a Japanese investor group (JFE Steel, Nippon Steel, Sojitz and Japan Oil, Gas and Metals National Corporation) and a Korean investor group (POSCO and the National Pension Service) jointly purchased 15% of CBMM for US$1.95billion
  • In August 2011, in an apparently identical deal, a Chinese group (Baoshan Iron and Steel, CITIC Group, Anshan Iron and Steel Group, Shougang and Taiyuan Iron and Steel Group) purchased 15% of CBMM for US$1.95billion
  • In October 2016, China Molybdenum purchased Anglo America’s niobium and phospahet businesses in Brazil for US$1.7billion.

Nb – chemical symbol for niobium / abbreviation for Latin nota bene: ‘note well’

Take note: Australia has a rare opportunity to secure a strategic alternative to vanadium and to existing niobium supply, for 80+ years: Alkane Resources’ world-class Dubbo Project plans to produce around 3,000 tpa of FeNb. With a sustainable supply chain, Alkane Resources offers customers transparency, reliability, product value and shorter lead times.

To progress the Dubbo Project to construction, Alkane Resources seeks a blend of financing from export credit agencies, strategic partners and equity and debt markets. Information for investors is available here

Advanced defence technology depends on Dubbo

To monitor threats and defeat hostile actions, we expect advanced defence forces to deploy – increasingly by remote control – high-performance machines and systems that can withstand extreme environments, including space. Producing these advanced technologies requires a sustainable supply of critical materials: rare earths, zirconium, hafnium, and niobium.

The United States, Japan, Korea, and European nations already rely heavily on these essential materials for military and civilian technologies, and demand is growing as applications expand. Of concern for those nations, one country – China – dominates rare earths supply and the Zirconium market.

Luckily, Australia’s mineral resources include a wealth of these critical elements. This presents a strategic opportunity to expand Australia’s role in global security, while sustaining economic wellbeing by adding value to our raw resources.

The elements of defence

Rare earths are a group of 17 elements, known as the ‘vitamins of industry’ because many applications require only minute – but essential – amounts. Permanent magnets are an exception, being composed of ~31% rare earths. Permanent magnets have multiple applications in advanced technology, including electric motors and guidance systems for vehicles, submarines, drones, missiles and robots. China controls 85% of the rare earth permanent magnet supply chain.

Rare earths, zirconium, hafnium and niobium are essential to the production of electronic sensors, and microprocessors in smart devices and computers. These elements are used for heat resistant alloys and coatings for aircraft, spacecraft, missile and rocket engines, as well as in armour for personnel and vehicles.

Alkane’s Dubbo Project is a large in-ground resource of rare earths, zirconium, hafnium and niobium, and the most advanced project of its kind outside China, with a potential mine life of 75+ years. Given the numerous high-tech applications of these elements in defence and beyond, the strategic importance of developing this project is clearly high. Delaying development risks further disruption of supply from China and a missed opportunity for Australia.

Adding value multiplies benefits

We can take lessons from China in extracting maximum economic and social benefit by adding value to our raw resources. My colleague Alister MacDonald has previously explained how the ‘dig it and ship it’ (and buy it back in processed form at retail prices) mentality of the old Australian economy must change to ‘dig it, process it, use it and ship it’. The Dubbo Project goes far beyond mining, by processing materials to standard and customised specifications, delivering advanced products for global markets.

Downstream processing of critical elements – transforming oxides to metals, advanced alloys, and other materials for defence or other applications – requires a skilled workforce of scientists, engineers, and technicians. In tandem with resource development, Australia must plug the ‘brain drain’, invest in education and training, and build our IP portfolio.

By adding value along the supply chain, Australia will create new, sustainable enterprises that will generate employment, reduce our dependence on imported products, and build national security. Technologies developed for defence will transfer to new and improved products and services for civilians. GPS navigation and drones are examples of military technologies applied to everyday life.

The first step is to invest in the source of this future wellbeing. To progress the Dubbo Project to construction, Alkane Resources seeks a blend of financing from export credit agencies, strategic partners and equity and debt markets. Information for investors is available here

Investors in the clean metals megatrend will clean up

The megatrend towards clean energy sources and industrial processes is driven by consumers and governments holding industry accountable for environmental sustainability and accelerated by research and innovation.

A major source of greenhouse gas emissions is the extraction of metals from their ores, traditionally involving reduction with carbon at high temperatures, or electrolysis. Both processes are ‘dirty’ because they produce carbon dioxide, a greenhouse gas. Unless renewable energy is used, these processes also contribute to greenhouse emissions through the burning of fossil fuels to generate the electricity consumed in metal extraction.

Under social and political pressure to reduce greenhouse emissions, clever researchers and innovative companies are developing cleaner metal extraction techniques.

Canada goes carbon-free in aluminium production

Aluminium is often called ‘solid electricity’ due to the huge energy demands of its extraction. Global production of aluminium last year was over 60 million tonnes consuming 14,151 kWH of energy per tonne.

In May, Alcoa and Rio Tinto announced the world’s first carbon-free aluminium smelting process that eliminates all direct greenhouse gas emissions from the traditional extraction process, producing oxygen as a by-product instead.

To commercialise the process, a joint venture company, Elysis, has been formed with combined investment of CAD188million from Alcoa, Rio Tinto, the Canadian Government, the Government of Quebec, and Apple. Use of the Elysis technology could eliminate 6.5million metric tonnes of greenhouse gas emissions in Canada alone, equivalent to taking 1.8million cars off the road.

YSZ? Because it’s clean and there are SOMany high-tech applications

Producing zero direct carbon emissions and reducing energy consumption by up to 50%, another new, clean means of metal extraction is energy-efficient electrolysis using solid oxide membranes (SOM) made from yttria-stabilised zirconia (YSZ). YSZ is a ceramic comprising zirconium dioxide made stable at room and elevated temperatures with yttrium oxide. Using an yttrium flux for electrolysis extends the life of the YSZ.

SOM electrolysis can purify aluminium, magnesium, and titanium – key industrial and aerospace metals – as well as rare earths, zirconium, hafnium, and niobium. The high-tech applications of these latter elements include permanent magnets for electric vehicles, wind turbines, robots and medical devices, semiconductors used in photovoltaics and electronics, surgical implants and electrical capacitors, and lightweight structural materials with aerospace applications.

Expect a rush on yttrium and zirconium

Commercialisation of SOM technology for extraction of any of the major industrial metals would create unprecedented demand for both yttrium and zirconium. Currently, China dominates global zirconium production with doubtful sustainability.

China also has a stranglehold on yttrium supply, as a by-product from rare earths processing. The Industrial Minerals Company of Australia estimates current global yttrium oxide production is 10,000 tpa in 2018, with supply exceeding demand by 30%. Yttrium was previously in high demand due to its applications in television cathode ray tubes, other luminescent displays and energy-efficient lighting, but demand slumped due to adoption of LEDs, with prices falling to USD3/kg.

This is likely to change fast with increasing demand for YSZ and yttrium fluxes for SOM technology. In addition, YSZ is used in gas and aviation turbines, automotive sensors, fibre-optic connectors, fuel cell components, and various ceramic products including knives and smart phone cases.

All this bodes well, not only for the planet, but also for ASM’ Dubbo Project, which is able to produce over 16,000 tpa of zirconia and over 1,000 tpa of yttrium oxide at full capacity.

A clean metal future

Carbon-free, energy-efficient metals production complements other clean, green megatrends. Consumer choice is based on price and performance, but growing awareness of responsible manufacturing and supply chain sustainability is increasing demand for products with small carbon and energy footprints too.

You’ll want to know that your electric vehicle or smart phone was manufactured using clean metals production – without a cost penalty – won’t you? Expect more exciting announcements about clean metals technologies as they scale up to meet global demand.

New US Defence Law Bans Magnets from China, Creates New Demand Potential

  • New US Defence law prevents purchase of rare earth magnets from China
  • Signed into law by President Trump this week, increases defence spending
  • Alkane says this to increase interest in its rare earths project as independent supply source

United States President Donald Trump this week signed into law the John S. McCain National Defense Authorization Act which sets an increased budget for defence expenditure.

Section 871 of the act prevents purchase of rare earths magnets from prohibited countries, like China, Russia, North Korea and Iran.

Multi-commodity explorer and miner, Alkane Resources (ASX: ALK)* sees this as a boost for its A$1.3 billion Dubbo project, which contains deposits of rare earths, hafnium, niobium and zirconium, since it represents an independent supply source from China.

A principal use for rare earths metals from the project is magnets, used across the automobile, renewable energy, aerospace, robotics and telecommunications industries globally.

Currently China produces 85-90 per cent of the world’s rare earth magnets, some 90% of rare earths magnets consumed by the US military are produced by China, world demand is outstripping supply and a shortfall of rare earths magnets is predicted by 2020.

This development follows a statement earlier this year by Prime Minister Turnbull at the time of his visit to the United States, which indicated an intended joint cooperation with the US on rare earths and high-performance metals.

According to Alkane Managing Director, Nic Earner, US needs could not be met without investment in new rare earths projects.

“Alkane’s Dubbo project is one of the few in the world which does not have a major Chinese shareholding or offtake committed to China,” Mr Earner said.

“This US development also opens the door for Australia in the downstream value adding manufacture of rare earth magnets,” Mr Earner said.

Alkane’s Dubbo project, which has a mine life of over 70 years, is construction ready with approvals in place and is awaiting financing.

Funding of the project to date has been assisted by Alkane’s nearby Tomingley Gold Mine, which generated A$60.1 million in cash flow for the year to June 2018, and currently Alkane has cash reserves of A$80 million.

In signing the act into law, President Trump described it as “the most significant investment in our military … in modern history”.

* Owner and operator of Alkane’s Dubbo project is wholly-owned subsidiary, Australian Strategic Metals Ltd.

Media Release: PM Turnbull Flags Greater Cooperation with USA on Rare Earths and Strategic Materials

  • PM flags strengthening ties with United States
  • Key components are infrastructure, trade and a Strategic Partnership on Energy
  • Energy Partnership to focus on “rare earths and high performance metals”

As Prime Minster Turnbull concluded his recent visit to the United States, he issued a statement indicating joint cooperation with the US on rare earths and high performance metals.

This has direct relevance for multi commodity explorer and miner, Alkane Resources (ASX: ALK)*, which is moving towards final commitments and financing of its A$1.3 billion Dubbo Project which contains deposits of rare earths, hafnium, niobium and zirconium.

These minerals have been designated “critical” in the USand the Prime Minister’s statement said:

“We launched the Australia-United States Strategic Partnership on Energy in the Indo-Pacific, and intend to work together on strategic minerals exploration, extraction, processing, and research and development of rare earths and high performance metals.”

A feature of Alkane’s Dubbo Project, in central west New South Wales, is that it offers a source of critical technology metals that is independent of China and traditional titanium sands production.

According to Alkane Managing Director, Nic Earner, the governments of Australia and the United States have recognised the value of an alternative source of rare earths and high performance metals.

“As there is increasing demand for the metals that are critical for uses in aerospace, renewable energy and electric cars, Alkane as a future supplier of these metals is likely to benefit from this new government prioritisation which puts the project directly into the national interest of both countries,” Mr Earner said.

Future production from Alkane’s Dubbo Project and uses of these metals includes:

  • Rare earths – for permanent magnets for wind power turbines, electric vehicles and industrial robots, as well as applications in medical imaging and smartphones
  • Hafnium – for increasing high temperature resistance, especially in space, aerospace and separate uses in semi-conductors, with Alkane’s resource positioning it as a leading source of supply
  • Niobium – a steel strengthening agent, with aerospace applications
  • Zirconium – for ceramics, fuel cells, jet turbine coatings and medical and smartphone applications

Establishing the importance of Alkane’s independent positioning is that China currently produces more than 95% of the world’s zirconium chemicals, over 90% of high-value rare earths, with Brazil providing 85% of the world’s niobium.

Alkane’s Dubbo Project is construction ready subject to financing and has a mine life of over 70 years.

Funding of the project to date has been assisted by Alkane’s nearby Tomingley Gold Operations, which in 2017 produced revenue of A$117.5m and profit before tax and non-recurring items of A$17.1m.

* Owner and operator of Alkane’s Dubbo project is wholly owned subsidiary, Australian Strategic Materials Ltd.

 

Hafnium Product Breakthrough Consolidates Dubbo Project Business Case

  • Alkane’s wholly owned subsidiary, Australian Strategic Materials Ltd (ASM), has developed high-purity hafnium dioxide products tailored to meet market requirements.
  • Hafnium oxide exceeding 99.8% HfO2, and 99.9% (Hf+Zr) O2, has been produced using a proprietary process to separate hafnium from zirconium at the demonstration pilot plant at ANSTO.
  • Over the past 12 months, ASM has consulted extensively with industry to confirm growing market demand for high-purity hafnium, which currently depends on supply from the production of zirconium metal for specialty alloys and the nuclear industry.
  • Global shortage of hafnium anticipated as demand is poised to outstrip current supply.
  • Hafnium metal for super alloys is currently trading in a US$800 ‐ $900/kg range. The ASM business case assumes a conservative product price of US$500/kg for its oxide.
  • ASM will initially produce 25tpa hafnium to meet projected market demand, ramping up to higher quantities as required.

Read more.

ASM