Waste to wealth: the commercial recovery of products from geothermal fluids

Analysis of market opportunities

Alistair Hill

Hill Technology & Management Limited

1

2

3

4

Introduction

Silica

Lithium

Content

Boron

5 Caesium, Rubidium, Magnesium, Trace elements

6 Conclusions

3

2 Silica

Content

Silica – speciality silica market

Global demand for all speciality silica is around 2.7 million tonnes worth US$6.9 billion This includes precipitated silica, silica gel, silica sol and fumed silica precipitated silica is the driving for for growth in speciality silica and this is being driven by use in ‘green tires’.

Silica – Colloidal silica – silica sol and precipitated silica

• Wide range of uses, end forms and brand names

• Papermaking, binders, investment casting moulds, carbonless paper, catalysis, absorbent, bulk densifier, flow agent, refractory ceramics, abrasion resistance, friction coatings, antisoiling agent, surfactant, fining agent, concrete densification, scientific research, quantum dots

• Established suppliers – AkzoNobel, Evonik, Bayer, Cabot, PPG, Nalco (nano particles)

• Well established value chains with a range of NZ stockists

• Cost base and particle morphology are critical factors

Colloidal silica 2001 - 2026

precipitated silica 2001 - 2026 • Demand growth driven by ‘green tyres’

• 1.4 million tonnes today. 2.4 million tonnes 2026

• US$1.1 billion today. $US3 billion+ 2026

• Highly dispersible command best price but demand is stretching supply despite capacity increases

• Particle size and morphology are critical for end product use

• Major players are PPG, Evonic, Solvey. New Zealand availability through Omya

3 Lithium

Content

Lithium - uses by grade or compound

• Four main product groups • Based on product types and specific markets • Product price lowest for technical grades and highest for speciality grades

Lithium - demand by product group

• Rechargeable batteries are the growth engine for lithium demand

• Big changes in the short to medium term influenced by oil price slump, increasing grid and domestic storage requirements, 48 volt architecture in vehicles

Closer look at lithium containing battery demand

Full hybrid utilizes 0.8 to 2Kg LCE Plug-in hybrid utilizes 1 to 10Kg LCE Battery electric vehicle utilizes 8 to 40Kg LCE 48V mild hybrid with stop-start utilizes 0.5 to 1Kg LCE

Closer look at lithium containing battery demand

In 2015 there is still significant use of NiMH because it is a mature technology Lithium ion is better for energy recuperation (braking, suspension) Lithium ion manufacturing price is improving. Key technologies of the future also favour Lithium (Li-s, Li-air)

Lithium - demand by product group (LCE)

Lithium - supply situation development 2010 - 2020

Significant supply growth 2015 to 2020. No major supply-side problems in this time scale Lithium contained demand 23,000 (2010) to 41,400 (2020) LCE 122,000 to 219,600

Lithium - supply situation development 2010 - 2020

Large technical grade oversupply to 2020 Not a great environment for new projects unless very high margin (e.g. Organolithium and speciality salts) However between 2020 and 2025 demand increases to 92,000 tons (490,000 LCE)

Lithium - supply situation development 2010 - 2025

By 2020 oversupply will be huge and capacity utilization will be only 63% Some commentators are predicting carnage across new projects and investment losses of millions By 2023 there are some supply constraints emerging – bearing in mind factors such as market proximity and grade requirements By 2025 capacity utilization over 90%

4

Content

Boron

Boron – uses

Fibreglass is the major market for boric acid and its growth is a driving force for boron demand – constituted 31% of usage in 2013

Ceramic tile industry is also increasing boric acid demand as a binder Also has a long history of use as a base for glazes and enamels

Borosilicate glass -heat and chemical resistance

Agriculture – fertilizers for maximising crop quality and yield

Detergents for laundry

Wood treatment and preservation

Borate demand by end use 2014

Borate demand and production

Borate demand over 2.1 million tonnes 2014 • Major influences are: Domestic

housing building and insulation • Solar applications and LCD-TFT screens

for borosilicate glass • Low energy light bulbs • Fertilizers and micronutrients • Tiles and frits driven by Chinese

building boom and urbanization • China largest consumer of borate

based materials

CAGR demand by region

Production is concentrated in Turkey (Eti Maden [state owned] claims 73% of reserves) and the US (US Borax [Rio Tinto])

Boron – Boric acid and sodium borates supply and demand

Sodium borates = borax pentahydrate (5 mol), borax decahydrate (10 mol), anhydrous borax - - Feedstock for fibreglass and agriculture products Non-sodium borates = boric acid, anhydrous boric acid - - Feedstock for speciality glass and ceramics Economical deposits limited to three major regions Supply tightening despite competitive capacity expansion – low abundance, concentrated reserves, complex extraction and processing Demand strengthening in both emerging and mature economies Boric acid current market price ranges US$620 – 900 per tonne Market value 2015 US$465 million to US$675 million – probably ~ US$550 million Market value 2020 US$620 million to US$900 million – probably ~ US$820 million

Borate demand over 2.1 million tonnes 2014

• Major influences are: Domestic housing building and insulation

• Solar applications and LCD-TFT screens for borosilicate glass

• Low energy light bulbs

• Fertilizers and micronutrients

• Tiles and frits driven by Chinese building boom and urbanization

• China largest consumer of borate based materials

Content

5 Magnesium, Caesium, Rubidium, Trace elements

34

With a density of only two-thirds that of aluminium, and just over one-fifth that of iron, magnesium alloys are used in aircraft and are becoming increasingly important in vehicle lightweighting

The metal is also widely used in the manufacturing of mobile phones, laptop computers, cameras, and other electronic components

China dominates magnesium supply using the dirty pidgin process to achieve low prices and make brines extraction non-viable

Magnesium

Organic magnesium compounds (Grignard reagents) are important in the synthesis of organic molecules.

Magnesium compounds such as the hydroxide (milk of magnesia, Mg(OH2)), sulphate (Epsom salts), chloride and citrate are used for medicinal purposes.

Magnesium is the second most important intracellular cation and is involved in a variety of metabolic processes including glucose metabolism, ion channel translocation, stimulus-contraction coupling, stimulus secretion coupling, peptide hormone receptor signal transduction

Price $US4,500 per tonne for industrial grades. Up to $35 per Kg for medical use

1998

2011

Caesium – properties and uses

Caesium is a soft gold-coloured metal that is quickly attacked by air and reacts explosively with water

Current price for pure caesium is ~ US$1,100 per 100g

Caesium uses

Drilling fluids

• The most common use for caesium compounds is as a drilling fluid (caesium formate brine). Speciality chemicals company, Cabot, manufactures from pollucite ore mined in Canada

Glass manufacture

• Various forms of caesium, especially caesium nitrate, caesium carbonate, and caesium bicarbonate are used as glass components to achieve various objectives.

• The refractive index of optical glass - in the bulk or on the surface only - can be modified by the addition of caesium salts. Through surface ion exchange with caesium-salt melts or solutions, the glass surface can be made resistant to corrosion or breakage

Aluminium brazing flux

• Caesium fluoride and caesium aluminium fluoride are increasingly used as flux components in the brazing of aluminium alloys. This is particularly important as the automotive industry changes to aluminium intensive vehicles.

Catalysis

• As a catalyst promoter - because of its low ionization potential, caesium promotes the performance of many metal-oxide catalysts used in heterogeneous processes.

• By forming and stabilizing complex salts with transition-metal-halide catalysts, caesium will also promote heterogeneous halogen transfer processes.

• Solubility polar solvents means various caesium salts are efficient bases for organic reactions (e.g. caesium fluoride, caesium carbonate)

Scintillation

• Caesium iodide and fluoride absorb x-rays, gamma and particle radiation emitting visible light. This scintillation effect is used in medical diagnostics, the exploration of natural resources, and in nuclear physics research

Atomic clocks

• Perhaps the most important use is in a caesium atomic clock - a vital part of the internet and mobile phone networks and GPS satellites.

• Provide the standard measure of time: the electron resonance frequency of the caesium atom is 9,192,631,770 cycles per second - some caesium clocks are accurate to 1 second in 15 million years

37

Rubidium– properties and uses

• Rubidium is a very soft, ductile, silvery-white metal.

• The second most electropositive of the non-radioactive alkali metals

• Melts at 39.3 °C

• Rubidium chloride (RbCl) is probably the most used rubidium compound

• Other common rubidium compounds are the corrosive rubidium hydroxide (RbOH), the starting material for most rubidium-based chemical processes

• Rubidium carbonate (Rb2CO3) used in some optical glasses

• Rubidium copper sulphate Rb2SO4·CuSO4·6H2O

• Rubidium silver iodide (RbAg4I5) has the highest room temperature conductivity of any known ionic crystal is used in thin film batteries and other applications

Rubidium uses:

• High-precision timing - the main component in atomic clocks

• A getter in vacuum tubes - combines with and removes trace gases

• A component in photocells

• Specialized glass manufacture

• Used in biochemistry (RbCl) to induce cells to take up DNA, and as a biomarker since it is readily taken up to replace potassium, and occurs in only small quantities in living organisms

• Considered for use in ion engines in space shuttles, because it can be easily ionized. Cesium, however, is more efficient

• Proposed as a working fluid for vapor turbines Proposed for thermoelectric generators using the magnetohydrodynamic principle that would cause rubidium ions to be formed at high temperatures

• Rubidium silver iodide (RbAg4I5) maybe used in thin film batteries and other applications - the highest ambient temperature conductivity of any known crystal

42

Conclusions

Opportunities:

• Colloidal silica and HD precipitated silica ~ significant demand growth

• Lithium supply will outstrip demand until 2020 and as battery and price will run at about US$4,700 per tonne

• Boric acid strengthening demand at ~ US$700 per tonne

• Magnesium – increasing demand for magnesium metal for vehicle lightweighting. Metal market dominated by China. Price ~ US$4,500 per tonne

• Caesium – complex market but pure metal ~ US$1,100 per 100g. Significant and increasing demand for Caesium formate for high pressure drilling. Global market size difficult to judge but many and varied uses

• Rubidium – some high technology applications that may be enhanced with autonomous driving and sensors. Price ~US$1,200 per 100g.

Each of the compounds or minerals discussed above has a market suitability based on a matrix of considerations centred around three areas:

1. The physical nature of the product including compounds, purity and in many cases particle morphology, consistency of supply and any necessary product support;

2. The price and value chain - for each compound a point in the supply chain(s) where it may be desirable to insert product. By identifying the correct customer/ price level within the supply chain for the finished product a much more robust idea of margin and therefore profitability will be gained;

3. Geographic market considerations such that supply to a New Zealand based supply chain will necessarily be less costly than a US based supply chain for a given quantity of compound. However, in some cases further processing might only take place in a few locations globally.