“Grossly undervalued” nickel ores are being exported by mining companies operating in the country, a geology expert revealed, as he called on the government and the private sector to explore the economic potential of mining scandium, a mineral also found in nickel ores, and other rare earth elements.
Carlo A. Arcilla, director of the University of the Philippines National Institute of Geological Sciences in Diliman, said it is high time that the Philippine government and the private sector explored the economic potential of extracting scandium and other rare earth elements.
He said the Department of Science and Technology had agreed to initially fund a P10-million research to identify scandium-rich areas in the Philippines.
The target of the study, he said, is to determine the level of scandium concentrates, which, he said, will likely be a “game changer” for nickel-mining companies.
‘Overlooked’
Arcilla, currently president of Solid Earth Sciences of Asia Oceana Geosciences Society, said many rare elements, aside from scandium, are often overlooked, because mining companies are only after exporting raw or unprocessed ores.
This, he said, is simply because the Philippines is yet to fully develop its downstream mining industry due to lack of or insufficient power-generating capacity needed to operate processing plants.
Mining companies that intend to operate processing plants in the Philippines are considering the establishment of coal-fired power plants to supply the needed electricity for its proposed processing plants.
China, which is the single major producer of steel products like stainless steel, is also the country’s single major buyer of nickel ores.
Ore content
Speaking during a lecture for journalists as part of a mine tour organized by the proponents of the Masbate Gold Project in Aroroy, Masbate, recently, Arcilla said nickel ores being shipped out of the country may contain substantial amount of scandium and other rare earth elements.
Scandium, a chemical element with symbol Sc and atomic number 21, is a silvery-white metallic d-block element. It is a rare earth element, together with yttrium and the lanthanides.
Unlike nickel, scandium commands a higher price in the metals market, and if the Philippines and its mining contractors found a way to extract the element, it could add value to the country’s mineral-exports value.
About 90 percent of the country’s nickel ores are being exported upon extraction, with only about 10 percent being processed by a few mining companies with established processing plants.
China, which is the biggest producer of steel products like stainless steel, does not have nickel and chrome, but these minerals abound in Indonesia and the Philippines, Arcilla said.
Pricier than gold
Scandium, he added, is much expensive than nickel, and is even more expensive than gold. The current price of scandium at the London Metal Exchange is at $170 per gram.
Global production of scandium is pegged at 10 tons a year in the form of scandium oxide, the demand for which is 50 per cent higher. China and Russia are two known producers of scandium. While scandium is considered a rare earth element, it is not really rare and could be found in Earth’s crust everywhere.
However, it is sparse and separating it to produce a gram is difficult. It also has limited commercial applications because of the absence of reliable, secure, stable and long-term production. The Philippines, for its part, is exporting around 30 million tons of raw nickel ores every year.
According to Arcilla, two years ago, he discovered that nickel ores being exported by mining companies contain scandium.
“I discovered two years ago that the nickel we are selling to China contains scandium. Scandium is more expensive than gold,” he said.
Local production
China, he said, does not have much iron and chromite, unlike the Philippines, which has all the important ingredients to produce steel and stainless-steel products, a reason the Philippines should enhance and develop its downstream mining industry, citing as an example its potential to become a global producer of steel and stainless steel.
“We have nickel, iron and chrome. Why can’t we produce our steel when we have all the ingredients here?” he said.
According to Arcilla, to encourage mining companies to invest in minerals processing, it should ensure adequate supply, and affordable or competitively priced electricity.
Since the Philippines has barely developed its downstream mining industry, he said nickel-mining companies export undervalued raw nickel ores.
In fact, he said only 10 percent of the actual cost of nickel is paid for by buyers like China.
“Maybe they [Chinese mining companies] have discovered scandium and found a way to extract this very rare metals,” Arcilla said, adding he was able to convince the Department of Science and Technology (DOST) to fund a research to explore scandium-rich areas. In the ensuing years, he said research will move to actually analyzing how much scandium and other rare earth elements are found in nickel ores.
Some companies, he said, have expressed interest in scandium because of its economic value.
In fact, Arcilla said, a group of scientists from the University of the Philippines will soon commence research on how to extract scandium.
Scandium is one of the most high-tech elements used for advance batteries that power modern gadgets, like cell phones and computers. Aircraft builders also find use for scandium.
Arcilla said mining companies can also invest in research and development to enhance their capacity to extract scandium from nickel ores even as a byproduct to add value to their nickel product.
Funds allocated for social-development management program, he said, can actually be spent by mining companies for the development of mining technology, he added.
Arcilla said all ores being exported should also be analyzed to make sure they are not grossly undervalued.
Scandium is not the only rare earth element with economic potential. Platinum, he said, is another rare earth element that can add value to nickel ore.
“[An] ore contains about 30-percent to 40-percent iron and 1-percent nickel. Nickel ores contain elements more expensive than gold—scandium. But there are other rare elements,” he said.
Nickel, for instance, is $28 per ton but this is just 10 percent of the actual cost, while scandium costs around $170 per gram. Gold costs around $1,231.3 per troy ounce.
The Philippines has yet to develop a way to produce scandium, Arcilla said, because “it requires special analysis”.
Nickel Asia, which processes nickel, he said, gets more value from nickel, because it has its own processing plant.
“If mining companies are capable of producing scandium, the cost of nickel ore will go up, or more mining companies will venture into processing,” Arcilla added.
Using high-pressure acid leach (HPAL), nickel will be dissolved, along with scandium.
Companies with HPAL technology in place, Arcilla said, have the capacity to produce scandium, but need to spend more for research and development, if they are to get more value from the ores they simply export after being mining.
The Philippines currently has 41 operating mines extracting gold and copper, nickel and chromite. A total of 27 of the 41 operating mines are into nickel-mining, but only two mines have their own processing facility for nickel.