ASX-listed Ionic Rare Earths expects the potential for growth in scandium demand to be immense, and is positioning its Makuutu rare earths project, in Uganda, to cater to this demand.
Since announcing in January that it will be producing scandium as a co-product, Ionic has increased the contained scandium oxide resource at its project to 9 450 t.
A scoping study by the company has found that it can produce between 20 t/y and 25 t/y of scandium oxide in the first year of production, ramping up to between 90 t/y and 100 t/y by year ten.
“The low capital expenditure development at Makuutu is a clear differentiator to other potential scandium sources, and provides Ionic with a tremendous advantage to help build and establish a key foothold in what the company expects will be metal of high demand once initial supply can be demonstrated,” Ionic states.
Other aluminium producers, such Rio Tinto and Rusal, have also entered the scandium markets as a potential metal of the future.
While the scandium market currently demands between 15 t/y and 20 t/y, the global transportation industry has the potential to turn scandium into a billion-dollar market, Ionic states.
The existing market for aluminium across automotive, aerospace, marine, rail and space applications is about seven-million tonnes a year.
The company expects there to be potential for significant market penetration by aluminium/scandium alloys into this market globally, representing scope for the scandium oxide market to grow to about 800 t/y.
Ionic explains that the adoption of scandium oxide will be heavily dependent on its price-point.
As the market grows, the scandium oxide price is forecast to reduce as economies of scale for production can occur. This reduction in price is expected to facilitate aluminium/scandium to be used in an increasing number of applications, further growing the potential market.
As a result, Ionic has adopted a long-term scandium oxide pricing basis, reducing from about $1 500/kg today, to initial pricing of about $1 000/kg and long-term pricing for the peak Makuutu scandium oxide production of about $700/kg.
On August 9, Ionic announced plans to evaluate the economics associated with the development of a standalone rare earth separation refinery for the processing of the critical and heavy rare earth dominant mixed rare earth carbonate from Makuutu.
The refinery will also separate and refine scandium to a purity exceeding 99% and is aligned with supply directly for aluminium/scandium master alloy manufacturing.
The company continues discussions with global groups interested in development of aluminium/scandium alloys and is exploring opportunities for collaboration in this sector.