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Metal Casting Technologies : June 2008
Dreamliner, is growing at an “unbelievable rate”. According to the Australian Bureau of Agricultural & Resource Economics (ABARE), major end use applications of titanium mill products include industry (49 per cent of world consumption in 2005), commercial aerospace (31 per cent), military (10 per cent, of which 7 per cent is military aerospace), consumer (8 per cent) and medical (2 per cent). The main consumers of titanium mill products are North America (30 per cent of world consumption in 2005), the European Union (24 per cent), China (15 per cent) and Japan (12 per cent). ABARE suggested that over the period 2005– 11, world consumption of titanium mill products is projected to increase strongly at an average annual rate of around 6.8 per cent. “Significant investment in new productive capacity, required to satisfy increased titanium demand, will be based on the Kroll process (the traditional method for producing titanium metal). “Major projected sources of growth in world titanium demand are industrial and aerospace applications. Strong growth is also projected for titanium consumption and production in China over the medium term,” ABARE reported. The CSIRO Light Metals Flagship’s work is aimed at halving the cost of producing titanium and its alloys, including production of titanium alloy powders and low-temperature compaction of powders to form thin sheet or complex shapes. “The direct powder route involves fewer processing steps and less material wastage than current melt and wrought processes,” said Professor Barry Muddle. Company SAMAG recent AMC Crest GTR M GTRW Hazelw Batchelor PMMA Anaconda Mtpy 52,500 Sep 99 96,000 95,000 80,000 80,000 34,000 10,000 50,000 90,000 Est op cost/lb $0.61 $0.59 Capital cost US $420M $375M $0.66 $520M $0.65 $561M $0.62 $421M $0.57 $423M $0.55 $178M $0.70 $154M n/a n/a n/a n/a What happened to magnesium? The problems with the development of a magnesium metal industry in Australia are explained here by Robert Brown, publisher of Magnesium Monthly Review. In the 1990s magnesium was the recipient of much interest in Australia and could be considered a “boom period” for development. At that time, Australia was in an excellent position to become the world leader in the magnesium industry. New Australian companies had the opportunity to create plants that would enable magnesium and magnesium alloys to be sold at a price directly competitive with aluminium. By 2005, the situation had changed and there were no viable magnesium projects in the pipeline. So what actually happened? Firstly, the timing was bad. The Chinese entry into magnesium could not have been predicted. No one could visualise how fast that industry would grow and how much it would lower the world price of magnesium. Also, most of the projects were being developed by new groups that were small and not technically aware of many potential problems. This could be seen in the difficulties encountered by Australian Magnesium Corporation. Because large sums of money had to be raised for electrolytic magnesium plants, the projects required lump sum, turnkey contracts for engineering and design. These raised the project costs to levels that far exceeded the original projections. A new 63,000 mtpa electrolytic plant was built and started up by Noranda in Canada. It struggled to achieve sufficient production to be taken out of the Noranda capital budget and created a huge drag on the corporation. It was closed down in 2003 after the project costs had reached nearly US$1 billion and the production was about 50 per cent of the name plate. The Noranda outcome was not lost on the world magnesium investment community and that put a real damper on Australian projects that were attempting to keep investors happy. The crowning blow was the decision of Norsk Hydro, formerly the world’s leading supplier, to get out of the magnesium business, citing inability to compete with Chinese production costs. They closed the largest operating electrolytic magnesium plant in Canada in 2007. Capital cost/tn 8000 7142 5416 5905 5262 5287 5235 1540 -- -- Operate cost/ton 1342 1300 1452 1430 1364 1254 1210 1540 -- n/a Table 1: Proposed Magnesium Projects with Estimated Costs - Australia (1999) * Annual cost for a 15-year loan at 8% interest, basis $/ton installed capacity 8% 15* yr Loan 917 819 570 677 603 604 600 176 -- n/a Total cost/ ton 2259 2119 2022 2107 1967 1858 1810 1716 -- -- Cost lb $US 1.024 0.96 0.917 0.995 0.898 0.843 0.82 0.778 -- -- * ROI=100x2000x (sales price/lb-total cost/lb)/Installed capital cost/ton %ROI @ 1.50 12.0 15.12 21.5 18.45 22.88 24.8 25.9 93.7 -- -- %ROI @ 1.20 4.5 6.72 10.45 8.2 11.47 13.5 14.5 54.8 -- -- METAL Casting Technologies June 2008 29