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Critical Minerals and the inevitable rise in demand

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

24 March 2023

Resources and Northern Australia Minister Madeleine King, who hosted a ministerial roundtable in Perth today, said the development of the critical minerals sector was a national mission which was essential if Australia was to help the world lower emissions and achieve net zero commitments.

“This was the first ministerial roundtable since 2020, and over the past three years global demand for Australia’s critical minerals has increased dramatically,” Minister King said.

“Ministers agreed that the development of our critical minerals sector is a national priority which will lead to new economic opportunities, particularly for regional Australia, and will help produce the materials needed to lower emissions in Australia and around the world.”

Minister King said Australia has vast reserves of the critical minerals that were essential for net-zero technologies such as electric vehicles, wind turbines, battery storage and solar panels.

“The road to global net zero passes through Australia's resources industry and our emerging critical minerals sector,” Minister King said.

The International Energy Agency (IEA) has stated the world needs to rapidly build secure and resilient supply chains for the critical minerals to meet global demand for low-emissions technologies.

— 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.

  • Nickel: A concise guide for ASX Investors from Market Index
  • Nickel and cobalt are critical components of lithium ion batteries ensuring high energy density and chargeability.
  • Higher nickel and cobalt levels in lithium ion batteries gives Electrified Vehicles greater range and faster recharge times.
  • The battery industry requires the metals specifically as soluble hydrated sulphates to be suitable for the cathode manufacturing process.
  • Purity of the sulphate product is key to produce high-quality batteries. PFS bench-scale sulphate production confirms that Ardea has the flowsheet to deliver highest-purity nickel and cobalt sulphate products.
  • The end products specification will cater to our customer needs and could include MHP (Mixed Hydroxide Products) or a cathode active material such as PCAM (Precusor Cathode Active Material).
  • Lithium ion battery usage is expected to increase markedly as Electrified Vehicle demand takes off.

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.
  • The scandium market in 2022 was approximately 20 to 30 tonnes in demand and was largely met by 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.

Inevitable rise in demand of Nickel and other battery minerals

Demand for batteries is forecast to accelerate over the next decade as energy storage becomes critical to the transformation of energy systems. Global nickel and cobalt demand is set to double by 2030, driven by battery applications.

Supply chain security issues and sourcing long term, reliable sources of sustainable and ethical nickel supply have continued to escalate and contributed to record nickel price appreciation. Nickel supply issues have been further exacerbated by rising geopolitical tensions.

Current world battery grade nickel production levels cannot keep pace with demand, even if every currently identified nickel laterite and sulphide deposit that can deliver sustainable and ethical mineral supply enters production. Without the development of significant nickel resources like the KNP, the EV revolution will be impeded and COP26 Glasgow climate commitments will be delayed.

The US Inflation Reduction Act and EU Critical Raw Materials Act encourage diversity of supply and supply chain certainty, which places Australia as a preferred supplier.

With Ardea’s KNP hosting one of the largest nickel-cobalt resources in the developed world, 854Mt at 0.71% Ni and 0.045% Co (6.1Mt contained nickel metal, 386kt contained cobalt metalASX announcement dated 30 June 2023), Ardea is in the prime position to provide essential supplies of sustainably sourced nickel and cobalt, along with other Critical Minerals (notably scandium and the rare earth elements (REEs) neodymium and praseodymium).