Australian Mines expands scandium scoping study as China tightens supply

• Australian Mines expands Flemington scoping study as China tightens scandium exports
• The company believes there’s a clear opportunity for Australia to play a greater role
• A new work program will underpin an updated scoping study

Special report: In light of China’s export restrictions on rare earths, including scandium, Australian Mines will carry out further studies at the Flemington project in NSW to enhance confidence levels of one of the world’s highest-grade scandium assets.

China currently accounts for around 67% of global primary scandium feed stocks and refines about 90% of scandium supply.

These new restrictions, in response to the US tariff increases on Chinese goods, are anticipated to constrain international availability and highlight China’s dominance within the space.

With a scandium resource of 6.3Mt at 446ppm scandium, Australian Mines’ (ASX:AUZ) Flemington project has the potential to increase to 28Mt at 2217ppm scandium using a 100ppm cut-off grade.

AUZ is expanding the breadth of its scoping study to incorporate updated metallurgical, processing and environmental studies aimed at enhancing the confidence level of the overall assessment.

This expanded program will be completed by the end of Q3 and will underpin an updated study.

Opportunity for greater Australian scandium supply

“With China potentially tightening scandium exports, there is a clear opportunity for Australian supply to play a greater role in the global market,” AUZ CEO Andrew Nesbitt said.

“The high-grade, near-surface nature of the Flemington resource gives us a solid foundation to build from and the upcoming work to update the scoping study will further strengthen our understanding of the project’s potential.”

Australian Mines almost doubled its scandium resource in January, jumping from 3.7Mt at 458ppm to 6.3Mt at 446ppm (300ppm cut-off), with 98% of that classified as measured and indicated.

Around 90% of the resource is within 50m of surface, presenting a compelling development opportunity for the company at a time when rising demand and Chinese control over the critical mineral has shone the spotlight onto Aussie production.

Supply and demand dynamics 

The US Geological Survey estimates that scandium supply and demand has doubled, from 15-25 tonnes in 2021, to 30-40 tonnes in 2023, and according to Mordor Intelligence, the market is expected to expand at a compound annual growth rate of 14.7% through to 2030.

According to an EY market study in 2022, demand is set to grow from 26 tonnes in 2021 to 1,970 tonnes by 2040.

Along with the contained scandium, the resource also has a nickel grade of 1350ppm and a cobalt grade of 601ppm, highlighting by-product potential.

Results from a third-party review of Australian Mines’ proprietary scandium magnesium metal hydride technology for high-capacity hydrogen storage — part of the company’s broader strategy to stimulate additional revenue from scandium resources — are expected to be released to the market once received.

This article was developed in collaboration with Australian Mines, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.