The current sliding price in Chinese scandium oxide market is likely temporary
----Interview with Robert W Mosig, Managing Director of Platina Resources Limited
- Asian Metal: Thanks for accepting the interview of Asian Metal, Robert. Would you like to introduce your company firstly?
- Rob: Absolutely - Platina Resources (ASX: PGM) is an ASX-listed scandium, cobalt and platinum developer based in Australia. Our flagship asset is the Owendale project, located in New South Wales, Australia, which hosts one of the largest and highest grade scandium reserves in the world.
- As the name Platina Resources suggests, we have also built a broader portfolio of tier one platinum group metals (or more commonly “PGM”) projects including Skaergaard in Greenland, one of the world’s largest undeveloped gold and palladium deposits, and Munni Munni in Western Australia, one of Australia’s most significant PGM occurrences.
- Asian Metal: Would you please give us a brief introduction of your Owendale project and its latest updates?
- Rob: Owendale is a unique assemblage of high grade scandium, cobalt, nickel and platinum laterite mineralization. It is the largest and highest grade scandium reserve in the world at 4.0Mt @ 550ppm Sc, 0.09% Co and 0.13% Ni. Owendale is located less than 7km from CleanTeq’s (ASX: CLQ) Syerston cobalt, scandium and nickel project and shares very similar geological characteristics. With CleanTeq’s market capitalisation of A$728m it is not hard to see the significant value potential for our Owendale project!
- Owendale has all the characteristics of a tier one asset; the mineralization is at ground level, it has a very high grade, its scale is of global significance, and it is proximal to infrastructure in central New South Wales. This means our project can be cheaply and efficiently mined using proven open cut mining methods.
- Asian Metal: What is the cobalt prospectivity at Owendale?
- Rob:We recently completed a drilling program and identified new high grade cobalt occurrences with a number of near surface, cobalt intercepts with grades up to 0.90% Co over metre long intervals. These large, high grade cobalt results confirm the significant potential for a cobalt-focused development, particularly given the Syerston cobalt development is only 7km away. The high grade cobalt results occurred in the northern zone of the Owendale project.
- We are currently assessing commercialisation options for the cobalt potential including co-development with scandium, joint ventures and potentially monetising cobalt rights.
- Asian Metal: What do you think is the advantage of the Owendale Project? What’s your project’s development prospect in the coming years? What do you see as the main challenges for this?
- Rob: Owendale stands above its peers with very high grades of scandium. In fact, Owendale currently has the largest and highest grade scandium JORC reserve globally. Our maiden reserves announcement confirmed that we can mine scandium at grades of over 600ppm for the first 35 years of production.
- In terms of development, we are now assessing ways to commercialise production of Owendale in the short term. We are in fact assessing a pilot plant development option that will allow small trial mining activity before the end of 2018.
- Our immediate hurdle is securing scandium offtake for Owendale in order to significantly de-risk our development. Securing offtake with pricing and volume certainty would allow Platina to rapidly complete funding and proceed to development of Owendale. We are currently in discussions with a number for industry players to secure our maiden offtake contracts.
- Asian Metal: Can you please introduce the application of scandium production?
- Rob:There are two main uses for scandium; the first is as a key input to manufacturing Solid Oxide Fuel Cells which can produce cheap electricity, using scandium oxide as a heat reductant during the energy process.
- The second and most important use for scandium is in the manufacturing of super lightweight aluminium alloys. This opens up huge industry applications in the transport industries, such as rail, road, marine and aerospace industries. This is particularly relevant to modern electric vehicles and the push towards efficient, light weight vehicles.
- Asian Metal: Scandium oxide 99.99%min market has kept witnessing weak demand and slow buying activities so far this year. According to Asian Metal’s prices, the current scandium oxide 99.99%min prices drop to RMB 7,300-7,800/kg D/P, down by 12% from early January. Consumers are still inactive to purchase. Would like to analyze the reason?
- Rob: As you are aware it is hard to determine the market price for scandium given the strategic importance of the metal and the limited visibility on contract prices. Any recent weakness in the scandium oxide pricing in China is likely temporary and potentially due to recent projects being commissioned including the Taganito project in the Philippines.
- Asian Metal: As far as we learnt, China’s scandium oxide 99.99%min annual production capacity reaches around 50t. Would you like to share your opinion about the production capacity and annual output of scandium oxide 99.9%min outside of China?
- Rob: We expect the global demand for scandium to increase significantly as secure, independent scandium projects come online and manufacturers can invest into scandium product expansions. Platina is at the forefront of the independent scandium projects and is located in arguably the best jurisdiction for mining supply, being Australia. Currently modelling suggests that the scandium market can increase to 350tpa assuming only 0.1% of annual aluminum production (~60Mtpa) absorbs scandium in alloy at a 0.5% level.
- Asian Metal: Are there any other opinions you want to share?
- Rob: We have a very exciting 6 months ahead at Platina as we progress offtake discussions and commence our definitive feasibility studies in Q1 2018. We look forward to keeping you and your readers updated regularly as we push forward with the development our world class Owendale project.
- Asian Metal: Thanks for your time and support for Asian Metal. Wish you every success in your business.
- Rob: Many thanks!
