Making Magnesium a More Cost and Environmentally Competitive Option

As the world’s lightest structural metal, the growth potential for magnesium is unprecedented in view of the accelerating demand for light-weighting in transportation and for portable devices. To seize this opportunity, magnesium must become cost and environmentally competitive with other lightweight materials, particularly aluminum. In view of its weight saving advantage, magnesium’s cost competitive position improves dramatically if its production cost is maintained at less than about 1.3 times aluminum’s production cost. Future growth also requires environmental competitiveness; magnesium producers need to utilize process technology that provides a much more attractive life cycle assessment than is currently achieved. This paper provides an update of the Zuliani Process currently being developed by Gossan Resources for its magnesium production project in Manitoba Canada. Process efficiencies, Greenhouse Gas emissions (GHG) and Life Cycle Analysis (LCA) as determined from thermodynamic modeling and experimental testing are compared to existing processes. Based on the results, Gossan is confident that its magnesium project will realize the operating cost and environment objectives needed to significantly enhance magnesium’s competitive position. Introduction Reducing weight especially in the front end has traditionally been used to improve vehicle handling, acceleration and braking distance. However, weight reduction is an important factor in lowering fuel consumption (Figure 1) as well as in extending the range of electric vehicles. As such, weight saving can be expected to become an increasingly important design factor as manufacturers respond to tighter fuel standards such as the 54.4mpg fleet average fuel economy proposed in the 2025 CAFE Standards. For example, Ford has reportedly developed a plan to use over 113 kg of Mg in future vehicles [1]. Figure 1: Relative effects of rolling resistance, air resistance, engine efficiency & weight on fuel savings [2]. -40 -30 -20 -10 0 0 10 20 30 40 % F u e l S a v in g % Improvement rolling air resist weight engine eff. Weight savings are achieved in two ways; primary reduction from substituting heavier materials with lighter ones such as replacing steel and aluminum with magnesium, and, secondary savings available in the chassis, powertrain and suspension resulting from the primary weight reduction. Proportionately, secondary weight savings will increase if there is a major light-weighting redesign resulting from a large primary saving. For example, USAMP in a recently published study Magnesium Vision 2020 estimated that total weight savings of 227 kg could be achieved from a secondary weight savings of 95.5 kg resulting from a major redesign that would enable 227 kg of steel and 59 kg of Al to be substituted by 154.5 kg of Mg [3]. USAMP predicts reduced weight by ~15% and fuel consumption by over 8%. Depending on the structural requirements, magnesium parts can provide weight savings of between about 50-75% over conventional steel, 40-50% over higher strength “light steel” and 20-34% over aluminum. Magnesium alloys also demonstrate excellent strength, stiffness, castability, machinability and dent resistance. For transportation, sporting goods and portable equipment design engineers, magnesium has the potential to be an extremely attractive ultra-light material that exhibits the highest strength and the highest stiffness per unit weight together with enhanced casting and fabrication characteristics. To seize this growth opportunity, magnesium must be cost and environmentally competitive with other lightweight material options, particularly aluminum. In view of its weight saving advantage, magnesium’s cost competitive position improves dramatically if it’s per unit weight production cost is maintained at less than about 1.3 times the production cost of aluminum (Figure 2). Long-term future growth also requires environmental competitiveness; magnesium producers need to utilize process technology with a much more environmentally attractive life cycle assessment than is currently achieved. Figure 2: Effect of % Weight Savings on the Mg to Al Competitive Price Point Two Fundamental Paradigm Shifts Affect Magnesium Production Cost & Pricing The magnesium industry has undergone two major paradigm shifts over the last two decades. The first paradigm shift started about 1990 when China began to produce magnesium metal employing 1940’s thermal reduction technology originally developed in Canada by Dr. Lloyd Pidgeon [4]. The low CapEx, raw material, energy & labor intensive Pidgeon Process was ideally suited to late 20 century China with low labor costs and lax environmental regulations. The net result of this development was an exponential growth in Chinese production, and correspondingly, a dramatic decline in magnesium market prices which had been previously averaging between US $3,100-$3,800 per tonne. By 1996, prices had fallen sharply to $2,500 per tonne and continued to decline to less than $2,000 by the turn of the century. The resulting dramatic price shock eventually led to the shuttering of many western magnesium facilities including Dow, Norsk Hydro, Pechiney, Alcoa and Timminco. Today, ~80% of the world’s magnesium is produced in China with over 95% of producers using the Pidgeon Process [5]. The second major paradigm shift started in about 2007. China’s rapid industrialization and move towards a freer economy combined with rapidly accelerating inflation and a sharp spike in world oil prices resulted in a dramatic and fundamental step change in Chinese magnesium production and delivery costs. The result was a sharp escalation in energy, labor and raw material costs used in magnesium production (Table 1). As early as 2007, industry observers had concluded that “the days of exceptionally low magnesium prices were indeed coming to an end” [6]. Table 1: Raw materials, energy & labor costs in China (2005 to 2011) – taken from various published sources Chinese inflation has had a dramatic impact on magnesium production cost and market pricing. Since 2005 the direct cost of producing magnesium in China and landing it in western markets has increased by between 1.7-1.9 times from ~US $1485 per tonne to between US $2530-$2830 by the end of 2011. Because Chinese producers tend to price marginally above “cash cost”, magnesium’s free market “floor price” has correspondingly increased by about 1.7 times over the same period from about US $1,800 per tonne in the mid-2000’s to just over US $3,000 per tonne by the end of 2011. Figure 3: Trends in Free Market Mg Price $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 M a g n e s iu m Y e a re n d P ri c e