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Crater Lake Project: Ensuring the supply for scandium

Jun 21, 2023

Scandium (Sc) is a relatively obscure element that has much future potential, as when it is alloyed with aluminium to make very high strength and lightweight alloy, it will have many potential new applications. Scandium-aluminium alloys are expected to meet 40% of defence and 60% of civilian needs for alloys in the future.

Scandium is a group 3 element that occurs in similar geological environments as rare earths and yttrium in alkaline intrusive rocks. But it is rarely concentrated to levels that make it easily recoverable as a primary mineral commodity. Typical concentrations are less than 100ppm scandium oxide (Sc2O3) in the order of a few 10’s of ppm. Most of the present production is from where it can be recovered as a minor by-product of rare earths or titanium mining. However, Imperial Mining Group (IPG:TSXV) has discovered an unusual rare earths resource in northern Quebec, called Crater Lake, hosted by ferrosyenite that contains exceptionally high scandium concentrations in the order of 300ppm Sc2O3 along with 0.35% total rare earth oxides (TREO) plus yttrium.

Awareness of the potential for scandium-aluminium alloys in light weighting in the aerospace, military and automotive sectors is growing steadily, especially as a result of global efforts toward reducing carbon emissions and reducing transportation costs. A 20% weight reduction of a Boeing 787 resulted in a 10 to 12% improvement in fuel efficiency. An Airbus A350 is made from 53% lightweight composite material; the A350 emits 25% fewer CO2 emissions than the previous generation aircraft. Scandium-aluminium alloys are also essential for reducing the weight of electric vehicles (EVs). This will extend the battery range in EVs and improve fuel efficiency in combustion engines.

Scandium-aluminium alloys are a good alternative to other alloys in these applications and would be cost-competitive with both carbon composites and titanium alloys used in aerospace applications with a material that is 40% lighter and cheaper to manufacture (by a factor of 10) yet deliver equivalent mechanical strength properties.

Potential automotive applications include chassis parts, electric motor housings, EV battery trays, hydrogen fuel tanks, crash components, suspension parts, engine blocks, welding matrix material, wheel hubs, alloy wheels, commercial truck wheels, fuselage components, welding matrix for aircraft assembly to replace rivets, atomised powders for use in Additive Manufacturing (AM). Expansion of solid oxide fuel cell technologies would also benefit from increased availability of high-purity scandium oxide.

The best potential defence uses of scandium-aluminium alloys are in replacing high-strength steel armour in military platforms (tanks, personnel carriers, ships, personal ballistic protection) and aerospace-grade titanium alloys (fighter jets) with scandium-aluminium alloys with yield, tensile and ballistic protection with equal strength characteristics but at 1/3 the weight for steel and 40% less weight than titanium. But scandium-aluminium alloys are still a small niche market. The global supply and consumption of scandium have only been about 15 to 20 tons per year. Its price has fluctuated around US$4,000/ton over the past five years, according to the US Geological Survey’s 5-year trailing average (USGS), and there is no indication of any government-sponsored stockpiles of scandium anywhere in the world.

Thus far, large-scale users in the aeronautic, automotive, and military sectors have been reluctant to adopt scandium alloys because of the lack of a long-term, sustainable scandium supply at an attractive price point. Since scandium oxide is still only produced as a minor by-product of other mineral refining processes, it continues to be in short supply.

Imperial Mining Group is now well-positioned to create a new supply of scandium oxide from their Crater Lake resource, which now exceeds 20 million tonnes, and with the June 2022 release of its positive Preliminary Economic Assessment (PEA) on the 100% owned Crater Lake Project, IPG is well positioned to create a new supply of scandium oxide at a reasonable price. Scandium oxide is modelled conservatively at US$1,500/kg based on a 61% discount to the US Geological Survey (USGS) 5-year trailing average. Scandium-aluminium master alloy is modelled at $204.00/kg, which is a 40% discount on the USGS 5-year trailing average. Using these conservative price assumptions, the project NPV is just under CA$3 billion at a 10% discount rate with an IRR (after-tax) of 32.8%. The initial CAPEX is projected at CA$870.9 million with a payback of 2.5 years.

Given that Imperial’s projections show excellent profitability at these price points, the company aims to address the need to make scandium metal price competitive. Likewise, Imperial is projecting a mine life of a minimum of 25 years based on the present resource base. Production is expected to be 110 tons of scandium oxide, 57,298 tons of scandium-aluminium master alloy (made from 1,146 tons of scandium oxide, which is 91% of its scandium oxide output) and 23,578 tons of mixed Rare Earth Elements carbonate concentrate. While rare earths are not the primary concern of the Crater Lake Project, their co-extraction strengthens the project’s economics. Yet, the resource estimate on the project reported in September 2021 is sufficient for at least 45 years of production at the notional production rate assumed by the PEA.

Imperial’s PEA also makes provisions for the alloying of scandium-aluminium (2% Sc) by way of co-electrolysis in a process similar to the Hall–Héroult method used for the production of primary aluminium metal. Imperial hopes to create a significant new scandium supply that will bridge the present supply deficit and lead to increased future production as demand for scandium-aluminium alloys grows.

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