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.

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