Strong Market For Strategic Makuutu By-Product
Ionic Rare Earths Limited (ASX: IXR) has commenced activity in marketing the scandium by-product from the Makuutu Rare Earths Project in Uganda.
Scandium is a strategic metal with a growing market dependent upon the generation of long-life and stable production sources and Makuutu potentially has a significant long-term source of scandium production, representing a substantive additional revenue source for the Project.
Managing Director, Tim Harrison, said Ionic is aiming to include by-product potential for initial annual scandium oxide (Sc2O3) production tonnages of 10 to 20 tonnes per annum and is considering a range of scenarios. As a by-product, Sc2O3 has the capacity to offset a significant portion of operating cost at Makuutu, with current pricing for 99.9% purity Sc2O3 trading for approximately US$1500/kg, or US$1.5 million per tonne.
The company has initiated discussions with various parties engaged in the adoption of aluminium- scandium (Al-Sc) alloys in the global transportation and space sectors, which represent the largest medium-term market.
The current Makuutu Mineral Resource Estimate announced to the ASX on 23rd June 2020 and set out in Table 1, of 78.6 Million tonnes at 840 ppm total Rare Earth Oxide (TREO), at a cut-off grade of 300 ppm TREO-Ce2O3, also includes 30 ppm per tonne of Sc2O3, containing 23001 tonnes of Sc2O3.
Scandium has several key functional benefits across all alloy series which make it the most potent alloying element. As little as 0.05-0.1% of scandium in aluminium alloys can significantly improve its performance, as illustrated in Figure 1.
To assist Ionic advance these opportunities and develop its scandium marketing strategy, the company has engaged the consulting services of John Carr in the role of Scandium Market Advisor. Mr. Carr has a wealth of expertise in the scandium market, having spent five years as Clean TeQ Limited’s Executive General Manager, Marketing, during which time he was responsible for mapping out and developing the marketing strategy and networks for scandium. He has been engaged on a contractual basis initially to assist Ionic with the framework for the overall scandium strategy and possesses a deep understanding of the processes required to produce Sc2O3, and how this can be integrated into the overall supply chain.
“Scandium represents another potential key differentiator for Makuutu. The opportunity for long life scandium production from Makuutu represents a significant potential feed source for the developing Al-Sc markets that require both diversity in supply and low-cost production capacity to support more wide scale mass adoption,” Mr Harrison said.
“Our belief is that a multi-faceted approach and early collaborative engagement is required to ensure success in the scandium market. As such we believe it is prudent to start engagement now, given the interest for Makuutu to be expedited to production in a climate looking for new alternative supplies of critical and heavy rare earths.”
“We are very pleased to have engaged John to assist Ionic in planning and developing a scandium marketing strategy, greatly assisting the company realise the accretive value of scandium to Makuutu.
“Having worked closely with John in the past, I know John’s experience and network across key markets in Asia, Europe and North America with be crucial, especially the Al-Sc alloy business.”
