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Ground Breakers: Canada backs Rio’s green titanium plans and Lake secures South Korean investor
Mining
share
- Rio taps Canadian Government support for pilot project to reduce synthetic rutile emissions by 95%
- Coal miners rise on Coronado-Peabody merger and Glencore contract price news
- Lake inks conditional offtake and investment agreement with battery maker SK On
One of the biggest looming supply crises in the world of natural resources is fast emerging in the world of mineral sands, where rutile prices have been picking up despite a global economic slowdown this year.
Natural rutile demand is completely constrained by the supply of the material, used as a titanium dioxide feedstock in paint pigment, welding and other applications.
“It’s expected to tail away, so it’s a high value product that’s becoming more and more scarce,” Sierra Rutile (ASX:SRX) finance director Martin Alciaturi said earlier this year.
Naturally occurring rutile is not the only source of supply for this market.
Ilmenite mineral sands can also be processed into synthetic rutile through a kiln-based process known as the Becher Process.
The issue? It emits a lot of CO2, meaning ilmenite sourced rutile comes with a much higher carbon cost compared to the naturally mined kind.
Mining giant Rio Tinto (ASX:RIO) has linked up with the Canadian Government to try change that, one of a suite of green initiatives which will be covered in a C$222 million (US$162 million and $259 million) investment over the next eight years from its Strategic Innovation Fund.
Does Rio need $259 million from the Canadian Government? Probably not. Will it take it? You betcha.
To be fair, Rio is tipping in a fair bit of its own coin, with the total spend coming to C$737 million (US$537m or $854m).
The name of the game is the critical minerals supply chain in North America, tying in the themes of the energy transition and resource security, which makes this a PR winner at the very least for Justin Trudeau and Rio boss Jakob Stausholm.
The big ticket item is the BlueSmelting project, which Rio says could strip 95% of the greenhouse gas emissions out of its Rio Tinto Fer et Titane titanium processing operations in Sorel-Tracy, Quebec.
A demo plant is currently under construction at RTFT to process up to 40,000t of ilmenite ore each year, expected to be up and running by the first half of 2023.
Scandi(um) style
Rio also says it is planning to quadruple production of the rare critical mineral scandium to 12t of scandium oxide per year, increasing its market share in the production of a lightly traded but important commodity used in solid oxide fuel cells and aluminium alloys.
Its US$22-26m project, which will include adding modules to its existing plant to extract high purity scandium oxide from titanium waste, will begin producing in 2024.
Meanwhile, Rio is also studying a downstream process that would see it produce titanium metal for the medical, aerospace and automotive industries, with a pilot plant to validate a process producing no direct greenhouse gas emissions due to be completed by the end of 2023.
The titanium metal supply chain is dominated by Russia, China and Japan, heightening the importance to the US and Canada of setting up a local source of supply.
READ: Does Thunderbird’s approval (finally) signal showtime for mineral sands?
Rio Tinto (ASX:RIO) share price today:
SK backs Lake on Kachi
Coal miners have their tails up on the back of confirmation from Coronado Global Resources (ASX:CRN) it is in discussions with American miner Peabody Energy about a potential merger.
CRN and Peabody both boast operations on each side of the Atlantic and have been big beneficiaries of coal’s miracle price run.
The other big news came through reports from S&P that Glencore had settled its latest supply contract for thermal coal to Tohoku Electric in Japan for a record US$395/t on a 6322kcal basis.
That contract is viewed as a major marker for Newcastle thermal coal prices, suggesting they will remain strong.
Nestled among those hard running coal names was lithium developer Lake Resources (ASX:LKE), which announced South Korean battery maker SK On would make a strategic investment of a 10% stake in Lake in a conditional framework agreement which also includes offtake of 50% of Kachi’s 50,000dmt LCE lithium product.
The deal would be for an initial five-year term with an option for a further five.
The CFA is reliant on a number of conditions being achieved, including the completion of a DFS, demonstration plant results from Lake’s tech partner Lilac Solutions, financial due diligence and product specifications.
“The CFA delivers a long-term strategic agreement with SK On, one of the world’s pre-eminent lithium-ion battery producers with a major growing presence in the North American market,” Lake executive chairman Stu Crow said.
SK On has battery producing facilities in the US, China, Hungary and Korea and is a supplier to auto giants Ford, Hyundai and Volkswagen.
The broader materials sector was down 0.75% at 1pm AEDT.
Ground Breakers share prices today:
At Stockhead, we tell it like it is. While Lake Resources is a Stockhead advertiser, it did not sponsor this article.
