Scandium, Cobalt, and Water Purification: CleanTeQ HoldingsA Microcap Teaser Solution In Advance !!
(Australian stock exchange CLQ, OTC pinks CTEQF).
CleanTeQ is sure to be the answer to future teasers you will be reading about from resource gurus, To save you all the trouble of solving them, I decided to write this article.
My portfolio was grotesquely overweight in gold and silver positions, and in moments of anxiety I thought it would be a good idea to diversify and take a few positions in something other than gold mines, royalty companies, Mongolian exploration companies, and small-cap copper miners with major operations in the Democratic Republic of Congo.
Thus I made a small speculation in CleanTeQ, solely on the basis that mining titan Robert Friedland was the Chairman, and CleanTeQ was the only resource company I could find that seemed to be in a position to mine scandium, a very rare metal that sells for a couple of thousand dollars a kilo.
My due diligence was so slight that I was embarrassed to emphasize my position to the readers at Stock Gumshoe. We are supposed to study these things a little more than I did for CleanTeQ. And after entering at 50 cents, the stock promptly dropped to 35 cents or so, making me glad that I did not look foolish by publicizing my position.
As the weeks went by, I started to find more information on the company that I should have found out beforehand. This was partly accidental, partly from other Gumshoe readers, and partly from new announcements and company news that occurred after I took a position. But the findings were all very positive, and because the company is so interesting I thought it warranted its own thread apart from the hard asset thread which I moderate.
I have a full long position and high hopes. And I thank Secretsquirrel, Griffin, Larry McKenna, and several others who helped fill in the missing pieces of the puzzle.
Below are my findings, opinions, and summary on CleanTeQ Holdings:
BUSINESS MODEL CleanTeQ is a hybrid company based with three bases: scandium mining and production, cobalt mining and production, and water purification. This seems like an odd combination, but as you will see, it is not. It is a stroke of genius. And I will explain why we should care about scandium and cobalt.
(1) The company is starting production of the Syerston mine, the world’s only scandium mine;
(2) The company will also produce significant amounts of cobalt as a co-product to the scandium;
(3) The company has a large-scale water purification technology, which will target municipalities,
Industrial operations with waste water problems, and mines, which also have water problems
PROSPECTS FOR THE THREE SEGMENTS
(1) Scandium is a very rare metal that usually occurs in only small amounts that are not economical to mine. It is mostly available as a by-product and the market is opaque, usually between private parties. Scandium has very beneficial applications in aerospace, aviation, and technology, but has not been widely applied because there is not a sufficiently reliable supply of it.
(2) Cobalt is essential in many batteries. Lithium gets all the investment press, but a majority of the battery formulations need cobalt, which is rare compared to lithium. Cobalt has a similar supply situation as scandium, it is mostly a by-product and is not commonly a prime mining target in and of itself. But demand for the electric energy market is growing rapidly and cobalt demand is growing and will continue to grow accordingly. Supply chains on cobalt are iffy.
(3) Water purification is a pressing need throughout the world. Cities with lots of people, industrialized places with lots of factories, or mines with waste water, all have a real and pressing need for large scale water purification. I think most people can accept this premise of widespread demand without a lot of documentation.
HOW DO THESE SEGMENTS RELATE TO EACH OTHER ? I cannot get too technical about the water purification technology, but I will try to explain what I understand, and how it relates to the scandium and cobalt operations. They call it Continuous Flow Ionization. Ionization is not a proprietary technology per se, but CleanTeQ has developed a way to implement ionization in a continuous feed, automated loop that improves volume, improves economics, is reasonably priced for installation, and can be custom-modified to specific waste problems. It can be used in conjunction with other filtration techniques. Further, it can be modified TO EXTRACT CERTAIN SUBSTANCES from the feed waste water. This is done by modifying the resins that are used in the ionization process.
Now it so happens that CleanTeQ has developed resins that can extract scandium and cobalt from waste water. So they potentially will have commercial sources of rare metals from the by-product waste of their water purification process !
HOW CLOSE IS THE WATER THING TO REALLY HAPPENING ? It is happening. CleanTeQ has signed a memorandum of understanding with a major Chinese municipality to implement their technology. There is a joint venture, 55% Chinese/45% CleanTeQ. Once the first one is up and working, China has a mind-boggling potential for water purification. For their teeming urban centers and for their mining and industrial locations, shall we say the potential is very large ?
CleanTeQ has 100% of rest of the world. CleanTeQ is closed-mouthed about other commercial sources, but they let on that they have been in contact with the likes of GE, Dow, and other big hitters. They state a pipeline target of $100 million by 2020; I predict they will do much better.
HOW CLOSE IS THE COBALT THING TO REALLY HAPPENING ? Very close. Battery useage is soaring and is the strategic target of many governments, corporations, and environmental groups. Batteries need cobalt.
HOW CLOSE IS THE SCANDIUM THING FROM HAPPENING ? This will take a while because the applications are high tech, with long lead times, and there is only one scandium mine in the world (CleanTeQ’s newly commissioned Syerston mine). CleanTeQ intends to develop the scandium market by being a reliable source of supply, and by driving the price down.
CleanTeQ will have viable margins with scandium prices up to half of current prices.
To give you an idea, the Russians made a few MIGs with scandium/aluminum alloys. They were faster, lighter, stronger. An addition of 0.5% scandium to aviation aluminum strengthens the frame, removes the need for riveting, reduces weight, and makes repairs easier. . The Russians dropped it because of costs; and Boeing and Airbus will not use it without a reliable source of supply. But there is about to be a reliable source of supply: CleanTeQ.
WHAT ABOUT IP PROTECTION ? I believe the IP and know-how moat is sufficient. CleanTeQ holds a perpetual license from a high-level Russian research organization that provided some of the foundation technology. I am not a patent lawyer and a lot of the know-how will be proprietary, not patented. CleanTeQ has been at this for over ten years, I think the barriers to entry are sufficient.
MANAGEMENT Totally a plus. Robert Friedland is the Co-Chairman and CEO, he has 20% of the company, great credibility and clout with the Chinese, and an unbelievable track record in mining. Sam Reggall is the other co-chairman. I know little about him, other than from my observations of him on an Australian investment show that aired last week. He was impressive.
MONEY AND FINANCES I don’t think there is anything at all to worry about. Friedland must be worth billions, the Chinese are in, and the concept has enormous potential.
Sources: as I mentioned, information is scant. My sources were the CleanTeQ website, presentations and and interviews with Friedland and Reggall, and the sketchy information on the brokerage sites. Nothing you cannot find on your own.
Long CleanTeQ
This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.
Ionic/CleanTeQ – Aug 8 2017
https://www.azom.com/article.aspx?ArticleID=14322
Long CLQ
28 JULY 2017
http://aluminiuminsider.com/aluminium-scandium-alloys-future/
Are Aluminium-Scandium Alloys the Future?
The second project in NSW, the Syerston project, has an estimated life of 20 years, and aims to produce 78,000 tonnes of Thortveitite ore per year, enough to extract about 42 tonnes of scandium oxide per year.
Finally, the third NSW mine, which has only recently started, is called Owendale. It will produce around 30 tonnes/year of scandium oxide for over a 70 years period.
Squirrel…Interesting, they give the names of the mines but not the names of the companies.
Yes noticed that to, had to Google the first one, The Nyngan project in NSW, turned out to be Scandium International. Np.
Well that leaves a ? mark for me…James
Part 7.2 of the attached PFS release details the info you are seeking. We can produce up to 170tpa of scandium oxide but we showed the economic impact of producing and selling only 50tpa because the market is currently very small. The additional capex was A$20M for a scandium recovery circuit. Extract below
Regards
Ben
Assuming an average scandium head grade of 53ppm (for more details please see ASX announcement dated 20 September 2016) and a processing recovery of 85%, the Project has the potential to produce up to 170tpa scandium oxide over years 3-20. The incremental up front capital cost of the scandium RIP recovery and purification circuit is A$20 million (assuming a recovery circuit capable of producing 50tpa of scandium oxide). Given the scandium is recovered as a by-product of nickel and cobalt production, the incremental cost of recovering scandium is relatively low.
The Upside Case assumes 50tpa of scandium oxide (Sc2O3) is extracted as a by-product and sold for US$1,500/kg Sc2O3. These production and pricing assumptions are consistent with those used for the dedicated scandium project assessed as part of the Scandium Feasibility Study (for full details see the ASX announcement dated 30 August 2016).
Ben Stockdale
Chief Financial Officer
Rubberworm, what this says to me is that they will start small, because the market is undeveloped, but they have the reserves and capacity to expand as the scandium market gets bigger. The current market is estimated at 20 ton py, but the article linked by Squirrel shows that useage of over 400 tons py in the near future is not an unreasonable forecast.
The useage of scandium is elastic, it depends on the price of scandium and the perceived reliability of supply. Cleanteq will be the primary arbiter of both supply and price.
And let us not forget, they will have a lot of sales on cobalt and nickel from the red-hot electric battery market. Now that I mention this, it occurs to me that they could simply take the co-product production from the actual nickel/cobalt sales, and let this be the amount of free scandium oxide that they allow to come onto the market.
To continue on a stream-of-consciousness speculative rampage, this would also fit nicely as a reason for the Cleanteq emphasis on cobalt and nickel, while the Platina
presentations focus on the more speculative scandium market. Syerston could produce scandium according to their firm orders on cobalt and nickel; Platina is a giant scandium reserve that can be held as the market for scandium is developed.
Long CleanTeQ, long Platina Resources
I’m not going back to read what the article said. But I think it said CleanTeQ is looking for 70TPA. No where have I seen that #. And CleanTeQ can do 170TPA. So why would they not put that amount on the market. Like you said and I agree ..”Cleanteq will be the primary arbiter of both supply and price. ” The article left 100PTA where? I think the article was BS IMHO.
Hi Rubberworm…I think the current situation makes future scandium production and price impossible to predict. For example, the forward demand assumptions by Cleanteq
of 450 tons suppose a 1.0% uptake by an entire industry. The real number could end up being 0.5% or 2.0% or some other number. They are just back-of-the-envelope guesses.
But in total, the numbers are bullish and optimistic for dramatic increases in scandium useage. We cannot expect precise numbers, but as long as the positive estimates and trends are in place, we can suppose we are on the right side of the bet.
Cleanteq…long…they are cited in the article linked by Squirrel:
“According to CleanTeQ… a 1% uptake of a 0.2% Al-Sc alloy would require 167 tonnes p.a. of scandium oxide [just for] the North American and European markets…a modest 1% uptake (1.5 kg of Sc2O3 per car) by 2025 would require 433 t/y Sc2O3…Long term supply contracts at [lower priceswill be necessary] for wider adoption of Al-Sc alloys….Very little (scandium) is needed to improve aluminium alloys properties, less than 1% (by weight will increase…strength by up to 150%, [preserve] density and resistance to corrosion… [improve weldability], [and double] fatigue life by up to 200%…
Re sc/al alloy, there could be huge market to gain lower weight of the strongest part of airplanes,,, the wing attachment fixtures. Those are under tremendous stress in landings and during turbulent air conditions,
so must be large & rigid, The wings themselves must be flexible.
DRC…reading about the situation there and the slant of the news, it wouldn’t surprise to see a UN peacekeeping move into parts of the country. Everyone on the outside wants the minerals, except for the Russians.
In some ways, not that’s it’s a total 100% guarantee there are far to many internal and external interests to let total war break out. A collapse is not in anyone’s interest, also the Chinese being there is a BIG plus of course.
War follows no logic. Chinese are all over Africa seeking resource supply.
No one knows what African nations will do. UN is ineffectual everywhere.
In case anyone might be interested, the percent by weight of scandium in scandium (III) oxide is 65.195%, approximately two-thirds. So the theoretical yield of scandium from 100 tonnes of oxide would be just over 65 tonnes. The actual yield will be less and it would be interesting to know the efficiency of the purification process.
eager…very interested, thanks. By any chance do you know the correspondent percentages of gold and silver in gold and silver concentrates ? I saw a report that cited tons of gold concentrates shipped, but don’t know how to convert tons of gold concentrate to gold ounce equivalent.
Hi HN, I will take a look at the percentages. Once we know this, we can work out the tons of gold equivalent in the concentrate and convert that to ounces. I’m assuming that ton is Imperial and tonne is metric.
Do you have any data from a particular producer?
eagerbeaver, $KNTNF K92 Mining recently released a report where they quoted tons of gold concentrate shipped. The project is in Papua-New Guinea, it is an old Barrick project.
I am long K92. They have an operating mine but the reserves are not established, so I consider it and exploration play with gold mine income.
HN, I have checked their website and they say they shipped 450 tonnes of gold copper concentrate in July and another 250 tonnes has been sent to port awaiting shipment. I’m not seeing any data on the percentage by weight of gold in the gold copper concentrate. Presumably they have a rough idea. Have you tried emailing them?
I’m seeing this but I don’t know if it refers to the concentrate, or material prior.
Over a 9 year operating life the plant would treat 3.2 million Inferred tonnes averaging 7.1 g/t Au, 25 g/t Ag and 1.7% Cu.
eager…I would presume that there they are speaking of gross operations. When they quote grams per ton over millions of tons, they are quoting grams per ton of ore processed, not grams per ton of concentrate shipped.
eager, I did not email K92, but I will contact them. Their concentrate may differ from other concentrates in use.
HN, If K92 is selling their concentrates to a smelter, then presumably the agreed price is based on the results of assays performed on multiple samples of ground concentrate, perhaps by a neutral third party. So you would think that K92 should have a very good idea of the amounts of precious and non-precious metals in their batches of concentrate.
eager, “…you would think that K92 should have a very good idea of the amounts of [precious metals] in their batches of concentrate…” …exactly my sentiments also. But they didn’t convert it for us in the news release. I have inquired of them by email of the gold pecentage in their concentrate. Will inform when and if I get an answer.
eager…when perusing the PVG website I saw a photo of bagged concentrate they had prepared for shipment to a contractor. They had photos of gold being poured at Brucejack, but I guess they ship off the silver in concentrate form to a smelter.
HN….I took a look at the PVG website, saw the photo of the first gold pour but did not see the bagged concentrate. Maybe they are initially focussed on gold because it is much more valuable than silver. I searched their site for concentrates and came up with this.
“1,000 tonnes of bagged material from the 2013 Valley of the Kings exploration program was processed at the Contact Mill in Montana and produced gravity and flotation concentrates containing approximately 3,120 ounces of gold, with final gold production subject to remaining assays and final establishment of weights and assays and settlement.”
Melbourne, 11 August 2017 Filed –
Section 708A Cleansing Statement and Appendix 3B
http://clients3.weblink.com.au/pdf/CLQ/01883044.pdf
Long CleanTeq
$CLQ
Ben, those are your employment bonus shares issued to you at 14.5 cents. Nice.
BHP to produce nickel sulphate – would be interested to see what Ben says in relation to CLQ competing with them? Can someone email the co ?
Most nickel ore is nickel sulphide crystals. Conversion to nickel sulfate is the first step in recovery of the metal. Also often combined with other metals.
Is not a bad thing for us if they start producing sulphate – the massive increase in demand from EV’s means we alone cannot supply everything the market is going to need. The winners will be the lowest cost producers – I have not seen any data published on what their cost of production is going to be but we believe that we will be among the lowest cost producers.
Ben Stockdale
Chief Financial Officer
Rubberworm – thank you.
Johnnn…BHP was a former licensee of Clean iX. I think nickel sulfate is the form that the battery makers need it. The battery makers do not buy nickel ingots. The announcement of a mining giant that they are going to produce nickel sulfate confirms the poitential size of the market. Nickel is not exactly a rare mineral.
From CleanTeQ’s website: “The battery industry requires nickel and cobalt to be supplied in specific chemical form for production of precursor material. In the case of both cobalt and nickel, this is generally in the form of hydrated metal sulphates (CoSO4.7H2O and NiSO4.6H2O).”
Cobalt price charts
http://www.infomine.com/investment/metal-prices/cobalt/
Interesting to note the enormous spike in cobalt price that coincides with the 2008 financial crisis.
$FTSSF—First Cobalt Announces Letter to Shareholders
https://firstcobalt.com/2017/first-cobalt-letter-shareholders/
I forget who mentioned this stock first a Gummie or Bohlsen@sa here is a timely update. First cobalt is one of the larger cobalt plays and is in the Ontario cobalt district of Canada. They are currently completing a merger and the Canadian regulators have halted trading. That trading halt is due to be over soon.
$FTSSF np
$CTEQF CleanTeQ Holdings…with DRC politics endangering cobalt supply, nickel and cobalt demand forecasts, the world needing clean water, distribution in place and contracts coming, miners needing low cost recovery methods, rare mineral demand going up, and offtake agreements coming, my feelings about CleanTeQ are more bullish than ever.
When this thread was introduced on February 6, Cleanteq’s closing price was 58 cents.
Long CleanTeq, overweight. It is now my second largest position.
A few here, me included have bought some Platina for the CleanTeQ connection. Yesterday I took a small position in another company right next door to CleanTeq – Australian Mines Limited – AUZ – $34m cap.
A map is on this link courtesy of teddy_afro plus other information.
https://hotcopper.com.au/threads/ann-high-purity-cobalt-sulphate-dispatched-to-customers.3575604/page-2#.WZL0Dunas2w
$CTEQF volume already 200K @ .6113 per TDA
Long – Best2ALL
Is A Scandium Boom Next – A Look At The Scandium Miners
https://seekingalpha.com/article/4099363-scandium-boom-next-look-scandium-miners
Sogiam…Nice to see nuzzlepix listed and getting press. The author is not long these stocks, he is writing for money. I’m not being critical about that…just pointing out that when I write, my money is where my mouth is.
He stresses the auto industry but it is the airlines which will be the leaders, I think.
I looked at AUZ, but from what I remember they have a number of diversified projects; so I didn’t think they were as direct a play as CTEQF on scandium and cobalt; and now of course Platina is a direct speculation in cobalt and scandium. And of course the water purification angle of Cleanteq is completely missed since his focus is scandium.
He calls them “miners” but I don’t think anybody is a miner of scandium yet. The market caps of his listings are really, really small, one was only $13 MM Australian.
Nothing to change my thinking although it is good to see scandium getting attention. A large position in Cleanteq and a small speculation in Platina are more than enough for me in scandium. Heck I don’t even have any oil, gas, steel, agriculture, or tech stocks, so I don’t need three positions in a metal that has an annual market of 20 tons.
$FYI Is A Scandium Boom Next – A Look At The Scandium Miners
by Matt Bohlsen@sa
Summary
Scandium is a very small market that has plenty of growth potential.
Scandium demand and supply are hard to really determine at this point; however with the increasing need for light weight aluminum/scandium alloys, scandium demand may soar.
A look at the scandium miners and my current top three.
Note: This article was first published on 17 July 2017 on Trend Investing, therefore all data is as of that date.
note: Clean TEQ and $PTNUF are mentioned
https://seekingalpha.com/article/4099363-scandium-boom-next-look-scandium-miners?uprof=46&isDirectRoadblock=true
$CTEQF, $PTNUF long
The author’s top three scandium plays are Scandium International Mining, CleanTeq, and Platina Resources. He says he has no positions in any of them but may go long Scandium International. IMHO he should go long CleanTeq and Platina instead. Cobalt is currently much more important economically and much more affordable than scandium.
Scandium pix…show me the autoclaves !
As of today CLQ’s autoclaves….”Process has started in terms of booking lift/vessels etc but they have not moved yet”
Hi Rubberworm,
We know Cleanteq has their autoclaves. It will take three years to get comparable equipment for anybody else who starts now…it takes weeks or months just to rig, ship, install and test ones that are already built.
Cleanteq has theirs, and it is taking weeks just to reserve a tanker capable of moving them. So we can imagine how long it will take for a new mine with no gear to get up and running.
I know we all know about them. As soon as I saw your post it reminded me to ask for an update. These autoclaves are very good news for shareholders. Means RF knows they will we into production and what a cost savings!
$CTEQF Cleanteq…attention longs. and anyone on the fence:
Multotec is a private world-wide mining services and equipment company based in J-burg, South Africa.
They are the Cleanteq distribution partner in Africa, and they are open for business on CleanTeQ’s Clean i-X process. Here is what Multotec says about Clean i-X:
“Clean-iX can be used to recover:
Precious Metals…Gold Silver
Platinum Group Metals…Platinum Palladium Rhodium Iridium
Base Metals…Copper Nickel Cobalt Zinc
Rare Earth Elements…Light (LRE) Medium (MRE) Heavy (HRE)
Speciality Metals…Scandium Vanadium Niobium Tantalum Uranium Titanium Zirconium”
Multotec is promoting and selling Clean i-X. It is a reality. We are just waiting for contract announcements.
They are repeating what Cleanteq has been saying. The fact that they are a third party on the front line selling it
gives great credibility and confidence about the process, at least for me.
Further, Multotec is offering CIF water purification. They do not mention Cleanteq by name but CIF is a registered trademark of you-know-who.
Long CleanTeQ
This is all great stuff!
eagerbeaver, be sure to look at the Multotec website yourself. These guys are major players in the mining services and equipment field. They have 300 existing mining clients in Africa and should sell a ton of gear; but these transactions are pretty complicated, they are industrial installations, and they take time. It’s not like buying a case of beer at Walmart.
HN, Yes, I will take a look at it. Please note that I replied to your earlier comment about the PVG website.
I’m not 100% sure about this relationship with multotec. The Oman project had a 400K value according to cleanteq, and it was mostly an equipment and engineering package, but multotec gets the wastewater management contract. I am hoping for water treatment contracts in the tens of millions of dollars, with long term payouts….. not just one and done equipment sales.
The Oman Contract is valued in excess of US$400,000 and includes a technology fee and payments for engineering, equipment and resin supply and commissioning support. The CIF® waste water treatment plant will treat waste water from a flue gas desulphurisation scrubber at a minerals processing plant at Port of Sohar Free Zone, Sultanate of Oman. The technology uses Clean TeQ’s proprietary Continuous Ionic Filtration technology to remove toxic pollutants and in particular sulphate, antimony and arsenic from the wastewater stream. The Clean TeQ solution is being provided to Multotec as an equipment design and supply package. Multotec is the principal contractor with overall responsibility for delivering the wastewater management systems for the mineral processing facility.
I do not think the Oman contract is financially meaningful in the big picture, in and of itself.
What it did was show that Multotec can deliver a contract, it added an application to the Cleanteq process inventory, it adds an installation in the presentation, and it showed that the technology passes muster to industrial users.
On any new process, it is sound to show that you can execute small projects. It adds the credibility necessary to land the bigger ones. Thus in my opinion the Oman contract was way more important than the money income involved from it. It was not a coincidence that the Oman contract was announced concurrently with the appointment of Multotec.
I basically agree, but hope to see some real “move the needle” water contracts in China, as opposed to these equipment type sales we see in the Oman deal.
Agree, big long-term water or mine contracts will open peoples’ eyes to the monster potential of CleanTeQ. Or a long-term metal contract with Airbus or big battery maker. t
Agree, big long-term water or mine contracts will open peoples’ eyes to the monster potential of CleanTeQ. Or a long-term metal contract with Airbus or big battery maker.
The pricing for the 99.9% pure Sc2O3 product we intend to make was estimated by an independent scandium market expert, Dr. Andrew Matheson, a leading authority on scandium alloys and scandium markets. Further, as an accomplished specialty alloy metallurgist who also works in conjunction the U.S. Department of Defense, Dr. Matheson is highly knowledgeable in scandium alloy development and in the specific applications that are likely to benefit most from the revolutionary advantages that Sc2O3 can deliver. Such knowledge is critical to accurately forecasting pricing. Dr. Matheson conducted a very detailed market assessment and supply/demand analysis to arrive at his pricing forecast. We had very little input into his analysis other than to disclose the product we intend to make and our production targets. The independent experts who wrote our Feasibility Study plugged in Dr. Matheson’s numbers for Sc2O3 pricing into their economic model.
Those who suggest that there is a “commodity price” for Sc2O3 clearly don’t understand that Sc2O3 is not a commodity product: it is a specialty chemical. There is a world of difference between commodities and specialty chemicals, and to speak of commodity pricing for Sc2O3 betrays a fundamental lack of understanding of specialty chemical (spec chem) products and spec chem markets. The NioCorp team has long experience in both the spec chem and commodity metals industries, so we understand these differences well.
In the spec chem industry, pricing by customer can differ dramatically for the same purity of product, such as 99.9% Sc2O3 (what we call “three nines” scandium, or 3Ns Sc2O3, for short). This is driven by a number of factors, including the following:
Different Product Specifications: the specifications for a 3Ns Sc2O3 material can be very different between customer A and B, even though both products are the same purity (99.9%). Often, this is due to the maximum allowed impurity levels that are present in the 0.1% of the product that is not Sc2O3. For example, Customer A might have a list of 5 elemental impurities that cannot exist above a certain level, typically measured in parts per million, or ppm, in their 3Ns Sc2O3. By contrast, Customer B may have a specification requirements that lists 30 or more elemental impurities that cannot be present above a certain ppm in the Sc2O3 they use. While both products are 3Ns Sc2O3, the differences between these materials can be substantial. One can be much more difficult to make than the other, as it can require more purification steps (e.g., chemical “washing” or “polishing”) to hit the product spec. It also can command very different pricing as a result.
Application-Specific Value. In a number of applications, Sc2O3 enables revolutionary performance and value to manufacturers. The use of “revolutionary” as an adjective here is appropriate; if you research the potential value and cost savings that Sc2O3 delivers to any of a number of industries (as we have done), it quickly becomes apparent that the value proposition of this specialty chemical is enormous. The pricing of our 3Ns Sc2O3 spec chem product will incorporate a portion of the added value it will deliver to our customers. If, for example, our Sc2O3 products helps a manufacturer save an estimated tens of millions of dollars per year – savings it could not achieve but for the in-spec 3Ns Sc2O3 we provide to them through our reliable supply chain – that fact will have an impact on the pricing of our material.
Supply Chain Security. Meeting a customer’s detailed product specifications can be a lengthy and difficult process, and start-up junior miners who have limited experience in producing spec chem products often learn this the hard way. Once a spec chem producer can demonstrate to a customer that it can consistently meet the customer’s spec, the customer is inclined to stay with that producer – particularly if there are limited supply alternatives, as is likely to be the case for Sc2O3. Spec chem customers tend to be “sticky” customers, which is very good for a producer that can meet a product spec. Given the cost of supply interruptions for a spec chem, a manufacturer will want to ensure the security and stability of its upstream supply chains, and this can factor into the pricing the customer is willing to pay for material produced in such supply chains.
Supply Chain Risk Mitigation. This is closely related to factor #3. Manufacturers not only want upstream suppliers that can meet their product specifications, but they also prefer those suppliers who produce materials in locales or nations that present minimal country or political risk. Materials produced in nations such as the U.S. are considered to have very low country risk as opposed to those who produce in nations with less stable political or governmental regimes. (You might want to Google recent developments in Tanzania, for example, regarding how country risk can influence the security of supply chains for products such as Ferroniobium, which we also will make at Elk Creek).
Robust Production Capacity. Another factor that can increase the market value of a specific producer’s Sc2O3 is production capacity. Independent estimates of global market demand for Sc2O3 peg that demand into the hundreds of tonnes per year. Producers with relatively larger production capacities are often seen by downstream manufacturers as more reliable suppliers, given that they have the ability to ramp production up in the event a customer’s demand grows. At present, NioCorp’s planned production capacity will be among the largest in the world. That provides us with added flexibility in negotiating pricing with customers who may wish to increase supply purchases as demand for their own products grows.
There is another issue to keep in mind with regard to spec chem markets: companies that make spec chem products rarely disclose the pricing they can command for the various chemistries they make. This is a fundamental tenant of the spec chem industry: you do not publicly disclose the price of the spec chem you make for Customer A versus the price you can command from Customer B. This is just good business practice.
That said, current pricing for higher-purity levels of Sc2O3 range $3,000 – $5,000 / kg, as has been noted by many observers. One can purchase Sc2O3 at even lower prices, but that is almost certainly for lower-grade material that probably needs additional processing, at additional cost, in order to meet a particular manufacturer’s product specifications.
All of this may help to explain why it doesn’t make sense to say that the price Sc2O3 has been set at ~$2,000/kg by junior miners who have executed non-binding letters of intent on their Sc2O3. There is no “commodity price” for 2Ns Sc2O3, or 3Ns Sc2O3, or 4Ns Sc2O3. Of course, in the wild kingdom of the internet, where anonymous voices can claim industry “expertise” without a day’s worth of experience in the spec chem manufacturing, sales, or customer service sectors, there will always be those who speak authoritatively about how these markets work, albeit inaccurately.
In short, there clearly is unmet demand for Sc2O3, and NioCorp will be well positioned once Sc2O3 production begins in Nebraska to meet some of that demand. In fact, the demand we forecast well exceeds NioCorp’s current plans for Sc2O3 production capacity, which is why we are bullish on multiple producers of Sc2O3 eventually coming online. While we are working with prospective Sc2O3 customers now, our business plan and project financing strategies do not require that an offtake agreement be in place for Sc2O3 yet. Our goals are to serve our customers’ needs while maximizing sales revenue for this revolutionary material. The sales agreements we intend to execute on Sc2O3 will be finalized when the time is right to achieve both goals.
I hope this background is helpful.
Jim Sims
VP of External Affairs
NioCorp Developments, Ltd.
+1.303.503.6203
Btw IMO that is BS. They use I think 3675/kg .
This is in Niocorp’s Full Feas
“NioCorp is working with 10 potential customers at the time of writing, and discussions with these
potential customers are proceeding under the provisions of Non-Disclosure Agreements (NDAs).
These potential customers can be separated into the following categories or final end products:
1. Scandium/Aluminum alloys used in aerospace, automotive, and other applications to
increase strength and allow for reduction of weight. Interested customers are situated at
various points in the supply chains for aerospace manufacturing and operation; specialty
alloy manufacturing; and specialty minerals and metal brokers/distributors.
2. Solid Oxide Fuel Cells. Scandium is used in the electrolyte of solid oxide fuel cells to
increase the conductivity at lower temperatures, allowing for higher efficiency and longer life.
Discussions with interested customers in this industry and its supply chains are continuing.
NioCorp has produced a small quantity of 99.9% pure Scandium Trioxide during lab pilot
testing which meets or exceeds the purity needed for virtually all mainstream commercial
applications. This material has been sent, and will continue to be sent, to interested
customers for their analysis.”
Now Niocorp offer is 3675/kg …Looks from FS they are talking about 99.9% pure.
CleanTeQ’s offer is 1500/kg same 99.9% pure.
I have noticed the wide range in pricing from $1,500 to around $5,000+ for a kg of scandium (III) oxide, the principal naturally-occurring form of scandium. The pricing depends to a large extent on the purity of the oxide; in how many 9’s are listed after the 99. decimal percentage point. I understand that suitably purified scandium (III) oxide can be used in fuel cells. But to use scandium in lighting, the oxide has first to be converted to a halide such as scandium iodide. I have been searching to find out which form of scandium is used in forming metal alloys with aluminum. I suspect that it’s the pure metal and not the oxide, in which case the oxide would first have to be converted to the fluoride or chloride and then reduced at high temperature with calcium in a stainless steel retort. Naturally, this process would make scandium metal much more expensive than its oxide.
rubberworm…great post, thanks.
What part of the explanation do you think is “BS” ?
Are you bullish on Niocorp ?
I asked Ben this…..”Ben what is this scrubbing ? Is 99.9% equal to 99.9% or can one be scrubbed better then another.” His reply…”Scrubbing is another chemical purification process. Different users may do different things to it prior to putting it into their alloys or fuel cells or whatever. However, if your product achieves 99.9pc purity you will be getting the full price.” JMHO IR at Niocorp is just trying to cover for their sc. price in their full feas. I use to own Niocorp did very good with it. But sold long ago. Unless they get US Gov. support them put who the hell would be paying 3675/kg. I agree with Johnnn CleanTeq will be boss at much lower price.
Thank you for a very interesting post. Reminds me of the difference between 303 and 304 Stainless Steel. 304 can be used in microwave environments and 304 can’t be used with microwave because of a small amount of steel/iron just enough to show rust spots.
Why shipping an autoclave is no small problem;
http://www.eatonmetal.com/mining/
arch1…no kidding. The Cleanteq ones looked even bigger, they were the size of submarines and the are located on a remote Pacific island.
It’s reassuring that somehow or other they were delivered there. They are enormously large and heavy. I’d love to see how they ship the things.
Hn, a bloke Mark on Hotcopper.com.au CleanTeQ thread who posted on 25/7 regards the autoclaves – I work next to the port of Newcastle can’t wait to see these land I assume they will come by ship.
I’ve asked him any photos yet, as woukd be good to see these “Subs” in transit!
squirrel…the picture in the Cleanteq news release has one with 20 or 30 heavy duty monster
wheeled flatbeds under it. It is Ginormous. Your mind is boggled thinking about them lifting it onto a ship.
Autoclave. Something as big as that which will float is normally towed by sea-going tug or tugs. or else loaded on a barge,,, some are built like dry docks.
Heavy Haulage Australia Autoclave move
https://www.youtube.com/watch?v=JSkz_vb6DTY
Here ya go 🙂
Recently moved one to Kilgore, TX and then Camp Minden has one to eliminate explosives //www.armytimes.com/news/your-army/2017/04/22/all-unstable-artillery-propellant-at-camp-minden-burned/
Ben, fun to watch. The transitions stump me…flatbed to install, flatbed to ship, ship to shore.
DRC news:
http://news.trust.org/item/20170816195531-byugf/
CLQ will dictate the market at $1000 – riggall Friedland are that far ahead of the rest
Notice, UN officials say they will investigate, since the Congolese government may be involved. Of course the government will blame the rebels. UN will cry that the government cannot keep order. Then in go the peacekeepers. So much for Congolese sovereignty.
$ASX:PGM closed at .093 AUD, $PTNUF is currently bid .081 ask .090 USD;
What is the deal? I respect paying a small amount for arbitration but .093*.79 (1 USD = .79 AUD) = .07347. What am I missing? TIA for answering.
Sogiam…thin US market for the time being. No one has heard of this stock. We have to live with bad bid/ask spreads on these microcaps, plus the broker will pack in something for the exchange of currency also.
We must play for big gains or buy-outs on stocks like these. It is too tough to scalp or go in and out profitably, at least for me. We have to sit there and wait for a big change in price levels. I have always maintained that these are long-term speculations, they are not good short- or medium-term trading stocks.
$PTNUF bidding – I’m patient and shall not pay that extreme amount of difference to the brokerage. GTC works for me. 🙂
Thanks for all you do HendrixNuzzles! 🙂
Long $CTEQF and temporarily (I hope) out of $IVPAF 🙂
I recently came across this excellent site comparing the different types of Lithium Ion batteries graphically.
https://electrek.co/2016/11/01/breakdown-raw-materials-tesla-batteries-possible-bottleneck/
I find it much easier to analyze and draw conclusions from diagrams than from reading lengthy written descriptions. What really caught my eye was the differences in the chemical composition of the cathodes of different Li ion battery types. One of the Li ion batteries, the LMO, which powers the Nissan Leaf, has a cathode composed entirely of manganese, no cobalt, and another battery, the NMC, has a cathode made up of one third each of cobalt, manganese, and nickel.
Ivanhoe recently came out with an announcement that they didn’t know why their stock is falling in price because they are going gangbusters. Could the reason for the drop be nervousness about the political situation in the DRC or could it also be because manganese, at less than one tenth of the price of cobalt, is making inroads into the cobalt market?
The NMC battery was being used primarily in China. The Chinese are switch to the LMC IIRC. You can find the information in one Matt Bohlsen EV articles that I have posted in;
https://www.stockgumshoe.com/2016/07/microblog-storage-of-electricity-batteries-big-image/
eagerbeaver…DRC politics will have a larger impact than cobalt prices on Ivanhoe.
In materials, Ivanhoe is sensitive first and foremost to copper prices. At some point zinc and PGMs might be influential, but right now it will behave according to the price of copper more than anything else in the materials space. Cobalt has virtually no impact on Ivanhoe prospects.
I’ve noticed that manganese is another important battery material. It is not widely discussed in investment discussions, and I do not have any specific ideas for investing in it; but it might be a good research topic and provide leads for underpublicized investments and speculations.
HN…..Well that’s reassuring. Now, those companies that place an emphasis on cobalt production for Li Ion batteries could be at risk as manganese makes inroads.
Here’s a link to Manganese Investing News which gives an overview of top-producing countries and the companies involved.
http://investingnews.com/daily/resource-investing/critical-metals-investing/manganese-investing/op-manganese-producing-countries-south-africa-china-austraia/
$CLQ, CTEQF long – Austrailian version of Form 4 filed x 2: http://clients3.weblink.com.au/pdf/CLQ/01884330.pdf
It is interesting to consider batteries using various metals such as cobalt vanadium nickel etc but Lithium is presently showing the most promise for the near future and has the great advantage of light weight in mobile uses. DOE has put a lot of money in seeking to double power capacity:
https://www.energy.gov/sites/prod/files/2017/07/f35/FY17_DE-FOA-0001629_VTO_Program_Wide.pdf
http://www.pnnl.gov/news/release.aspx?id=4437&utm_source=Google%2B&utm_medium=Social&utm_campaign=NB-Battery5000717
Lithium Ion batteries make up about 70% of the battery technologies available today. The link below, which I also sent previously, shows the structure of the Lithium Ion battery. The lithium is present in ionic form as the electrolyte and comprises very little of the battery in terms of mass. The major metals involved are cobalt, manganese, and nickel, and they comprise the cathode in the various formulations as illustrated. The anode is made of graphite.
https://electrek.co/2016/11/01/breakdown-raw-materials-tesla-batteries-possible-bottleneck/
Yes lithium batteries are going to be here for sometime to come with an ever growing share of the market. Alkaline and lead acid will be history in the not distant future. What will vary in the Li-ion battery is the content of metals that are already used cobalt, manganese, and others to come. Where the greatest improvement can be made is in the Anode and Cathode by changing the formulation of these you change the charge rate and self discharge rate to name a few characteristics. I recently bought some AAA lithium batteries from China that are suppose to have a very low self discharge. When I first got them I put several in my charger only to find that they were at 1.5V already. They have been sitting on my desk and in a flash now for about a month and are still at 1.5V. Now if in 6 months that is still true I will be ecstatic.
Right now vanadium is a totally different type of battery the flow battery. PNNL has alrady done some work on the flow battery that has extended the capacity by 70%. I read that there has been some work done on using flow batteries in automobiles. That is scary since the electrolyte in flow batteries is primarily sulphuric acid. Even as good as the fuel cells are in the NASCAR racers in a few crashes they will still rupture.