Metals used for steel alloys, once considered the poor cousins to iron ore, are starting to come into vogue, with both big and small players moving heaven and earth to uncover the next big discovery of critical minerals vital to the massive global steel industry. The coveted group includes manganese, vanadium, molybdenum and others and Australia has rich resources of all of them.
Australia’s at-times booming economy over the past few decades has been significantly boosted by China’s insatiable appetite for Australian iron ore.
The nation’s iron ore industry is huge, with research house IBISWorld estimating Australian industry revenue from the steelmaking ingredient this year to be an eye-watering $131 billion. To put that in some perspective, IBIS estimates the revenue from the entire supermarket and grocery store sector in Australia to be $140b a year – just $20b more than iron ore.
An estimated 99 per cent of Australia’s iron ore supply comes out of Western Australia, with the bulk of that material originating from the red dirt of the Pilbara region that covers an area of some 500,000 square kilometres about 1200 kilometres north of Perth.
China accounts for about 80 per cent of the iron ore exported, with steel manufacturing activity in Asia’s biggest country the primary driver of that demand.
Iron ore is always the main element in steel making and growth in construction and steel demand will inevitably lead to growth in iron ore demand.
However steel is often alloyed with various metals to produce a vast array of products such as motor vehicles, ships, pipelines, hardened automotive products and machinery components to name just a few. Alloy steels are in high demand in industries such as construction, manufacturing, aerospace, automotive and electronics.
“Alloying” a metal can enhance its properties and significantly increase its strength, corrosion resistance, hardness and conductivity. Pure metals are rarely used in manufacturing as they are often too soft.
From simple hand tools to turbine blades in jet engines, there is a significant market for a wide set of metals in alloys and Australian ASX listed companies have their ears pinned back exploring for it.
The most common alloys used with steel include metals such as manganese, nickel, chromium, molybdenum, vanadium and silicon.
Aluminium, copper, niobium, titanium, tungsten, zinc and lead are less commonly used.
The alloying elements added to the base iron and carbon structure will usually total up to 5 per cent of the alloyed steel’s composition.
Alloy steel can be characterised as either high or low alloy steel. Most alloys add only a small percentage in additional elements for improved hardenability and strength.
High alloy steels are generally less common although stainless steel is the most common high alloy and results from a minimum 10.5 per cent chromium that is usually added.
The high portion of chromium provides stainless steel with more corrosion resistance due to the chromium oxide coating slowing down the rusting of the underlying layer.
Using manganese increases the strength and hardness of steel and its heat resistance. It is one of the essential alloys that helps convert iron into steel and decreases the brittleness of steel.
ASX-listed nickel explorer Estrella Resources is one Australian company that is looking outside our island for manganese and was tenacious enough recently to secure one of the first ever exploration permits in Timor-Leste (formally East Timor).
Estrella has attracted interest from market punters recently with several head-turning announcements of super high-grade manganese discovered in the South East Asian country.
On November 18, it revealed a new supergene manganese discovery in Timor Leste, with a three-metre-high bed of outcropping manganese discovered during reconnaissance mapping.
Using a portable-XRF machine on crushed samples, high-grades of 57.5 per cent and 63.4 per cent manganese were recorded, some of the highest grades encountered to date.
The company’s new Ira Miri prospect lies across the river valley to the east about 4.4km southeast of its Sica ground. At Sica, it unearthed in situ supergene manganese in the hills surrounding the prospect.
Management says it is planning follow-up geophysical surveys for the two areas that sit within the manganese-rich Lautém municipality of Timor-Leste.
Caption - High-grade manganese has been found by ASX-listed explorer Estrella Resources in the southeast Asian country of Timor-Leste. Credit: File
Vanadium can also be alloyed with steel to significantly increase its strength and quality. Usually a small amount is added, typically less than 0.1 per cent or 1 kilogram per tonne.
It can increase the low-temperature toughness of steel and improve the welding performance of ordinary low-alloy steel.
Vanadium-steel alloys are regarded as super tough and used in armour-plating, axles, piston rods, crankshafts and heavy-duty tools.
The addition of less than 1 per cent vanadium can make steel shock-resistant and vibration-resistant.
Junior explorer Surefire Resources holds a flagship vanadium project – Victory Bore – in WA’s Mid West region.
Victory Bore has a mineral resource of 464 million tonnes grading 0.3 per cent vanadium oxide, 5.12 per cent titanium oxide and magnetite iron going 17.7 per cent.
Surefire has been laser-focused on developing relationships with large entities in the Kingdom of Saudi Arabia, signing several memorandums of understanding with corporate groups and government-backed investment firms.
The company plans to produce 1.25mt per annum of a vanadium-titanium magnetite concentrate from the project and by using a downstream process, convert the upgraded ore into a myriad of in-demand products.
The beneficiation process is expected to upgrade the material from its in-ground value to about 1.43 per cent vanadium. It is aimed at improving both its attraction to interested parties and the potential to produce a ferro-vanadium product, titanium slag, pig-iron, high-grade iron ore, a high-purity iron oxide pigment grading 99.9 per cent and importantly, vanadium electrolyte.
The vanadium grade after the concentration process, rather than the in-ground grade - is the most important aspect, a metric that is often overlooked. The company says its ore responds well to the beneficiation process, with the grade increasing more than three-fold and recoveries exceeding 90 per cent.
A bonus is that Surefire’s vanadium is contained within the magnetite ore and not found in ilmenite – which is not present in the resource – unlike the material of many of its competitors. Notably, Surefire says it has also fielded several enquiries about its potential vanadium electrolyte product that appears to be in-demand.
Victory Bore is emerging as a unique project as it also contains a zone of high-grade aluminium that sits between two magnetite/vanadium zones at the project. The company says a 37mt resource has been estimated at a grade of 25 per cent, providing it with a further opportunities to produce high-purity alumina.
Management says the high-purity alumina feedstock could also be processed in Saudi Arabia where demand for the product is increasing, or it could export to Europe where demand is high. For now though, its focus is on the vanadium and iron possibilities.
The little-known metal, molybdenum, can improve the strength of steel even when only small amounts are added.
Molybdenum is useful when the alloy needs to withstand high-temperature environments. In the case of some stainless steel, molybdenum will also improve corrosion resistance. Similarly to chromium, molybdenum improves the corrosion resistance of steel. It can also increase its hardenability, toughness and tensile strength. It can increase steel’s hardenability by lowering the required quench rate during the heat-treating process to make strong and hard steel.
Junior exploration company EV Resources is developing its copper-molybdenum flagship Parag project in Peru, where thick intersections of high-grade molybdenum have been encountered near surface.
Focusing purely on the molybdenum hits, results include 258.8m grading 0.14 per cent from 1m, including 58m at 0.3 per cent from 23m.
A whopping intercept of 476m running 0.14 per cent from 3.2m included a 348m stretch of mineralisation going 0.2 per cent. A further 72m hole returned 0.36 per cent of the high-temp alloy metal from surface.
EV says the near-surface molybdenum grades at Parag are comparable to the highest-grade pure moly mines in the world. It believes the credits from molybdenum are a key by-product that will significantly improve the project’s economics.
Nickel also plays an important role in increasing the strength and toughness of steel. In larger amounts, nickel has a big impact on the strength of alloys and is one of the key components in stainless steel as it increases its corrosion resistance.
Terrain Minerals is among a number of listed companies searching for the next big nickel discovery. It is based in elephant country in WA’s renowned Fraser Range Belt. The Albany-Fraser Orogen extends for a minimum 1200km along the southern margin of the Archean Yilgarn Craton and was made famous after Sirius Resources’ (now IGO’s) earth-shattering Nova-Bollinger nickel-copper discovery in 2012.
Terrain recently completed a ground-based electromagnetic survey at its Lort River project that sits in the same geological belt as IGO’s discovery.
Management believes a geophysical “eye” feature identified at Lort River shares strong similarities with IGO’s “eye” that was identified prior to its discovery of the large - and now producing - Nova-Bollinger operation.
Terrain is currently processing the data from the survey and gearing up to hammer the promising targets with its maiden drill program.
The company believes a recent airborne geophysical survey returned compelling evidence that the southern half of the Albany-Fraser Belt could be just as promising as the northern region where Nova’s operation sits.
IGO is on the record saying it believes the magmatic processes required to form Nova-style massive nickel-copper sulphide deposits have most likely occurred along the entire length of the Albany-Fraser Belt.
Terrain has its theories about the region, believing the huge mafic intrusive units forced up within the earth’s crust from internal pressures are the real answer to finding a new nickel-copper deposit.
Whether Terrain is onto something big at Lort River or not may be answered within the next few months.
Steel alloys are very much a part of the critical mineral story and with Governments all over the world now seeking to lock down supplies of critical minerals, Australian listed companies are in the box seat. Australia itself is well endowed with pretty much all listed critical minerals and Australian ASX-listed juniors in particular, have a good nose for finding them on other continents too.
Once considered the poor cousin to iron ore, steel alloys are rapidly forging their own path, becoming more and more lucrative and the hunt for them is now well and truly on.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Craig Nolan
