Eco Investor December 2015

Pre-Profit Securities

The Environmental Benefits of Scandium

Clean TeQ Holdings has released further information on the environmental benefits of scandium, a metal it will mine at Syerston in NSW if a feasibility study and a recovery and purification demonstration plant in Perth perform well.

Scandium is lightweight and adds strength to aluminium, giving aluminium weight, fuel and cost savings in the key transport sectors of airlines, motor vehicles, trains and ships where its use is growing and it is expected to be a prefered material for decades.

The airline industry already makes extensive use of a range of lightweight materials and these comprised 78 per cent of plane weight in 2010 and will reach 85 per cent by 2030. The use of aluminium was a high 49 per cent and on current estimates will fall to 42 per cent by 2030.

In comparison, the automotive sector has a lot of catching up to do. In 2010 lightweight materials were only 29 per cent of vehicle weight and should reach 67 per cent by 2030. On current trends some of this will come from aluminium which will rise from 5 to 12 per cent. It will be even higher for the most fuel efficient cars. For example, to meet fuel efficiency standards, the Ford F150 has an aluminium content of 25 per cent of vehicle weight.

An example of possible future weight savings is the metal belt buckle on airline seat belts. The traditional design weighs 150 grams but this can be reduced to 70 grams for an aluminium- scandium buckle made by additive manufacturing. Clean TeQ says that on an Airbus A380 with 853 economy seats the weight reduction would be 72.5 kilograms. Over the life of the aircraft, the fuel saving is 3.3 million litres and the financial saving around $3.1 million.

Although composites such as carbon fibre can be lighter and stronger, alloys such as aluminium-scandium have advantages such as lower costs for materials, forming and joining, and maintenance; less corrosion; and they can be recycled.

Clearly there is a lot of room for aluminium-scandium (Al-Sc) alloys to capture market share. In the airline industry, the current back log of orders for Boeing and Airbus and an uptake of 5 to 20 per cent of a 0.2 per cent Al-Sc alloy would mean potential demand of 10 to 30 tonnes per annum of scandium, said Clean TeQ.

Factoring in forecast future airline orders increases potential scandium demand to 50 to 200 tonnes per annum. There would also be demand in other markets such as small planes and helicopters.

In automotive manufacturing, an Al-Sc uptake of 1 per cent would require 167 tonnes of scandium per annum in North America and Europe alone. A 10 per cent compound annual growth rate in the global use of aluminium in light vehicles at a 1 per cent uptake of Al-Sc or about 1.5 kilograms per car would give demand of 433 tonnes of scandium per annum by 2025.

But this needs a price for scandium that can lead to widespread adoption, the identification of suitable niche components, and joint ventures with companies in the supply chain.

At the right price, there are also applications for Al-Sc alloys in the rail and marine sectors where high powered magnets are used in maglev trains and for corrosion resistant boat hulls; in high value packaging such as aluminium cans and foils; in construction; in high voltage transmission wire where scandium-aluminium alloys give high efficiency; and in solid oxide fuel cells and lighting.

All this gives good reasons to watch the outcome of Clean TeQ's demonstration plant and feasibility study. (ASX: CLQ)

The expected growth in demand for aluminium from the aircraft and automotive industries.





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