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Critical Minerals and the race to secure ethical long term supply

Critical minerals are metals and non-metals that are considered vital for the economic well-being of the world's major and emerging economies, yet whose supply may be at risk due to geological scarcity, geopolitical issues, trade policy or other factors. Among these important minerals are metals and semi-metals used in the manufacture of mobile phones, flat screen monitors, wind turbines, electric cars, solar panels, and many other high-tech applications.

The minerals ranked as most critical by the United States, Japan, Republic of Korea, and the European Union including the United Kingdom, are as follows (ranked by Geoscience Australia based on synthesis of individual country rankings):

Rare-earth elements (REE), gallium (Ga), indium (In), tungsten (W), platinum-group elements (PGE) including platinum (Pt) and palladium (Pd), cobalt (Co), niobium (Nb), magnesium (Mg), molybdenum (Mo), antimony (Sb), lithium (Li), vanadium (V), nickel (Ni), tantalum (Ta), tellurium (Te), chromium (Cr) and manganese (Mn).

Geoscience Australia

16 February 2024: Nickel placed on critical minerals list

Nickel and Cobalt Market – Demand for Ethical Supply

  • Global nickel and cobalt demand is increasing, driven by stainless steel, electric vehicle (EV) and energy storage applications
  • US Inflation Reduction Act (IRA) includes Foreign Entity of Concern (FEOC) condition which, from 2025, will mean vehicles with batteries containing certain Critical Minerals, including nickel, extracted by an FEOC, will be ineligible for the IRA tax credit
  • The rise in Chinese controlled nickel production from Indonesia has resulted in the nickel market being in surplus, but this trend is expected to reverse, with the nickel market moving back to deficit
  • Increased demand, along with FEOC and EU Critical Raw Materials Act (CRMA) considerations, will accelerate supply chain diversity and security from jurisdictions, such as Australia
  • End users will look to preferred Australian nickel supply making the KNP a strategic and important part of the nickel supply chain which meets the high ESG standards expected by society

Nickel placed on critical minerals list

16 February 2024

Federal Resources Minister Madeleine King has placed nickel on the Critical Minerals List, giving nickel companies opportunity to access billions of dollars in Commonwealth funding.

The Commonwealth Resources Minister has the discretion to review the Critical Minerals List at any time, and to make interim amendments if there are significant changes to technology, trade, domestic capacity or geopolitical developments.

Since the List was updated on 16 December 2023, six operating nickel facilities have either announced reduction in operations or gone into care and maintenance.

The decision to place nickel on the list means companies will have access to financing under the $4 billion Critical Minerals Facility and critical minerals–related grant programs such as the International Partnerships Program ($40 million).

A strong resources industry is central to a strong Australian economy.

The road to net zero runs through the resources sector. Minerals such as nickel are essential to the energy transition.

— Australian Government Department of Industry, Science and Resources - read full release

Ardea’s Project portfolio is abundant with the key minerals which are sources of Ni, Co, Au, Sc and REE.

The Kalgoorlie Nickel Project MRE contains a total of 854Mt @ 0.71% Ni and 0.045% Co for 6.1Mt nickel and 386kt cobalt contained metal (Mineral Resource Estimate, JORC Code (2012)) (see ASX announcement dated 30 June 2023). The Goongarrie Hub within the KNP was the subject of the 2023 PFS which showed that the Goongarrie Hub will be a multi-decade operation with strong production and earnings (see ASX announcement dated 5 July 2023).

The 2022/23 PFS used a base case 3.5Mtpa operation, with two HPAL autoclave trains, each rated at 1.5Mtpa, as well as an AL circuit of at least 0.5Mtpa. The operation can be expanded if required utilising beneficiated feed. The Goongarrie material allows the mineralisation to be easily matched to either the HPAL or AL circuits, and results in maximising resource utilisation, driving carbon emissions down and positive ESG outcomes.

The KNP Goongarrie Hub PFS subset, reported 437Mt @ 0.71% Ni, 0.042% Co and 25ppm Sc.

The PFS only considered Ni and Co. Other Goongarrie Hub deposits and potential of Scandium and other critical minerals, along with other enhancements, may be assessed in Definitive Feasibility Study (DFS).

In 2022, Ardea confirmed Emu Lake massive nickel-copper-PGE sulphide discovery with 2.72m at 5.42% Ni and 0.85% Cu from 391.04m, within intact felsic footwall contact of the Western Ultramafic (WM). Completed 3D modelling at the Binti Prospect (Emu Lake Project) based on results from the drilling and DHEM, with current interpretation indicating prospective mineralised channels are still open. Further RC drilling is planned, however, will be scheduled after KNP Goongarrie Hub DFS work streams. With Ardea holding 20km of fertile komatiite strike at Emu Lake, there is significant scope to extend this nickel sulphide discovery and make additional discoveries.

About Critical Minerals

  • Nickel batteries have nearly twice the energy density of other materials. Nickel-based lithium-ion batteries, such as Nickel-Cobalt-Manganese (NCM) help increase driving power and range.
  • A nickel-based battery will weigh less and take up less room than other battery types.
  • Nickel-based lithium-ion batteries continue to hold a large share of the EV landscape.
  • Nickel batteries are leading EV applications in Commercial and Public transport including bus, truck, utility, tractor and marine sectors.
  • Lithium-ion battery producers are favouring high Ni (>90%) cathodes.

Ardea will assess Scandium as a by-product at KNP Goongarrie in future studies.

  • Scandium is a lightweight, soft metal with a high melting point and good electrical and heat conductivity.
  • Scandium is alloyed with aluminum (Al-Sc) similar to how niobium is alloyed with steel.
  • Scandium increases the strength of aluminum but reduces its weight and provides it with increased flexibility, heat resistance, and corrosion resistance, making it ideal for applications in aerospace, aviation, automotive, defense, and energy transmission.
  • Scandium plays an important role in enhancing the performance and efficiency of Solid Oxide Fuel Cells, which are devices that convert chemical energy into electrical energy.
  • Other uses of scandium include lasers for military and medical purposes, tracer in cruel oil refineries, and use in alloy powders in the growing 3D printing powders market.
  • The scandium market in 2023 was approximately 80 tonnes with supply at around 70 tonnes in demand largely meeting supply.
  • However, even minor increases in annual global aluminum production (which Scandium is alloyed with) would result in an annual global scandium demand of 345 tonnes, which is 11x the 2022 demand.
  • As the predicted for Scandium increases in Aerospace, Automotive, Defence, SOFC, and Wind Turbine industries, Scandium demand could reach almost 500 tonnes by 2030, which is 16x the 2022 demand.

REEs are likely to be produced as a by-product of the Ni and Co mining and processing at Goongarrie. During PFS work to finalise General Arrangement Plan for the KNP in January 2023, drilling at Goongarrie West location returned significant Total Rare Earth Oxides intersections. For more on the Goongarrie West Ionic Clay REE Discovery, see ASX announcement dated 30 January 2023.

  • Rare-earth elements (REEs) are used as components in high technology devices, including smart phones, digital cameras, computer hard disks, fluorescent and light-emitting-diode (LED) lights, flat screen televisions, computer monitors, and electronic displays.