A company that wants to be a competitor in the scandium market.
Capital cost estimate for the Project is US$77.4 million,
Operating cost estimate for the Project is US$636/kg scandium oxide,
Oxide product volume is 35,975 kg per year,
Current market price is about $3,000 per kg so this looks absolutely great, doesn’t it?
$50 million gross margin a year!
Except, despite what the economic models say about perfect competition and no one producer influences the price, this isn’t actually so. The global annual market is some 15,000 kg a year at present.
Hand up everyone who thinks that producing twice actual consumption a year, over and above current production, is going to lead to the price being maintained.
The price assumption in the PEA is US$2,000 per kilogram (kg), as an average price covering all product sold, over various product grades.
Not going to happen, is it? Scandium oxide was $300 a kg a decade ago. Sure, demand is up since then. But not enough to absorb this volume.