Mounting demand for neodymium-iron-boron magnets puts the spotlight on ioneer
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Special Report: ioneer’s Rhyolite Ridge lithium-boron project could be a key beneficiary of the increasing demand for neodymium-iron-boron magnets.
Magnetic resonance imaging, medical imaging systems, small but powerful headphones, and electric car motors are all high-tech devices that rely on permanent magnets that feature rare earths.
The critical importance of rare earths has led the US to form an alliance with nine other countries – including Australia – in an attempt to reduce China’s control of supply.
Given its central role in modern devices, it is unsurprising than that US rare earth imports from China rose 1.2 per cent to 452,473kg in August 2019 – higher than August imports in the previous three years.
This is due in no small part to electric car manufacturer Tesla increasing production of its Model 3 electric car and making the switch to neodymium-iron-boron based magnets.
These magnets feature the better-known neodymium plus two other elements; iron, which is the fourth most abundant element in Earth’s crust, and boron, which is decidedly less common.
Boron supply comes primarily from two sources, Rio Tinto’s Boron Mine in California and several mines in Turkey held by Eti Maden AS.
These two producers account for almost 80 per cent of the world’s boron supply with the remaining production coming from various suppliers in China, Argentina, Chile and Russia.
Besides its growing use in permanent neodymium-iron-boron magnets, boron is also used for building materials where it is prized for its heat resistance, in energy-saving applications such as fiberglass insulation and glass tubes for solar panels, and as an essential micronutrient for fertilisers.
Research has also indicated that boron could be used to increase the life of lithium-ion batteries by isolating the contact points between the lithium metal and the solid electrolyte.
This wide range of uses has led lithium miner Orocobre (ASX:ORE) to forecast that global borates demand will rise at a 3 per cent compound annual growth rate to 2.65 million tonnes of B₂O₃ equivalent by 2023.
However, this rising demand may not be met by supply as none of the smaller suppliers are capable of major expansions in production capacity.
Conflict in the Middle East could also impact negatively on supply coming out from Turkey, which has three-quarters of the world’s boron reserves.
Emerging lithium and boron player ioneer (ASX:INR) could play a role in filling this particular supply gap.
The company is currently advancing its 100 per cent owned Rhyolite Ridge project in Nevada towards production commencing in 2021.
Rhyolite Ridge is a large, shallow lithium-boron deposit that is envisaged to produce 20,000 tonnes of lithium carbonate and 173,000 tonnes of boric acid per annum at full capacity.
While the spotlight has previously centred on the lithium resource, the growing demand for neodymium-iron-boron magnets could bring its boron content into focus.
Boric acid currently fetches between $US700 and $US900 per tonne. This will no doubt help drive development of Rhyolite Ridge – a project which already features very healthy economics.