The Mining Report | May 13, 2014 : Could the other Australian...

The Mining Report | May 13, 2014

: Could the other Australian scandium project be a partner for Bloom?

JK: Yes, indeed. In 2011, Platina Resources Ltd. (PGM:ASX), discovered the Owendale scandium deposit along with a platinum system. The platinum grades aren't high enough yet to justify development, but Platina raised money to extract a bulk sample for metallurgical studies on the Owendale scandium deposit, which is separate from the platinum zone. In about a year, we'll know more about the metallurgy.

As with rare earths, metallurgy and mineralogy are key factors. Owendale will have a grade close to 400 g/t. The question is whether the difference between 300 grams (300g) and 400g is wiped out because the ore has a higher content of magnesium and other acid-consuming elements. The companies have to assess the grade and whatever else scandium-enriched ore contains. The cost of getting rid of the other stuff may balance out the grade difference.

Nonetheless, this is a substantial resource. Now that Metallica has returned to the drawing board with Lucknow, EMC's Nyngan deposit has the first-mover advantage, which I doubt Platina's Owendale will overtake. Owendale will arrive to serve the alumnimum-scandium alloy market. The end users want to see multiple sources of ore-grade, primary scandium deposits so they are not reliant on a single source. The situation is different from rare earths in that no meaningful scandium supply currently exists, but there is a latent potential consumption of 500-1,000 tonnes scandium oxide annually by 2025. There is a race underway now to be the party that supplies Bloom's needs, but the very completion of this race will coax demand from the aluminum-scandium alloy sector, so that the runner-ups collect the same prize.

Those juniors with scandium deposits grading 300 g/t or better do not need to stab each other in the back, as rare earth juniors felt compelled to do because their goal was to each supply the world's incremental demand growth. It will be a while before a lot more deposits are found, even if New South Wales undergoes a scandium rush.

TMR: You consider investing in scandium an investment in changing the world. How will scandium make the world a better place?

JK: If airlines converted the skins of the planes and all the brackets into aluminum-scandium alloy, it would reduce the weight by 15–20%. That would greatly reduce fuel consumption. It might even persuade the airlines to shelve their very unwelcome plan to add a fifth seat to the middle row of their overseas aircraft.

Ford is producing aluminum-based pickup trucks to help it reach the 2025 target of 54-mile-per-gallon fuel efficiency. Apart from fiddling with the engine and aerodynamics, the only way you can do that is reducing the weight of the vehicle. Even electric cars would benefit from a lighter weight that does not sacrifice safety. Unlike other metals such as beryllium, which bestow remarkable properties to alloys, scandium is not toxic. It is not often that resource juniors can positively change the world by finding and developing a mine. Scandium is that opportunity

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