RE:RE:High-Capacity Hydrogen Storage with Scandium ChemicalThis story is a perennial chicken egg fable. A fable the EV market will re write soon! And not just EV cars. Think EV ocean going vessels and locomotives, Want to push back on the Musk boring company threats to kill locomotives and rail companies? The rail roads know the need to get EV Locomotives fast. Musk is an existential threat to their existence. He is thinking about road trains like we currently see in Australia long EV long haul trucks. However once you start producing Scandium at scale and it gets adoption we would then see by product supply have a reason to come on stream. That would be deflationary to the product price - but that’s where contracts come in. For the oxide powder it would certainly bring the price down, for alloy’s it would be up to the Aluminum producers how to charge for that input. But until we see a mine producing we won’t know what kind of secondary supply will be exercised to undercut the oxide price. So why would you lend money to get the mine up and running when all the secondary supply might make your investment pear shaped. Also, at which point how do you know the metrics you've used in your mine study will be there after by product supply hits the market because your mine has encouraged by product development? In other words your mining will give incentive for smaller batches from other sources to get developed undermining your mining P&L assumptions. What is needed is a large secure contract with a rail car producer or military application such as Austal.
I would like to see the NSW government and Austal come in with a contract then see Rio Tinto partner on Nyngan with SCY or perhaps SCY getting a royalty on such a long life asset as Nyngan or an outright sale of the NSW assets. 200+ years of supply!
So to overcome product supply deflation through growth we need to see contracts. It might be a government or a government contractor. Or it could be the EV everything push! GE has an EV locomotive hitting the rails soon, that would certainly be the impetus for producing Scandium Aluminum Alloy box cars that weight 500kg less per car and are equally as strong as their steel counterparts. The EV revolution will need light weighting across the board and that’s where Sc Al alloys will come into their own. I think it might be time to revisit those Nyngan AISC assumptions again, and see if they cannot be brought down. But does it matter? Deposits like HoneyBugle and Nyngan offer the flexibility of large scale and life. A metric to supply the by products producers can’t match.
The inflexion point is about to be happen.