Magnesium - Applications, Die-Casting and the Global Market

The strong demand for magnesium - growth is around 3% per annum - is driven by the metal’s unique properties that so far have no substitutes. Magnesium is as strong as steel and 40% lighter than aluminium. It readily alloys, and is easy to machine and cast. It also has unique damping qualities for sound and vibration. Its principal negative property is corrosion, although new techniques are now available to prevent this.

Applications of Magnesium and Magnesium Alloys

The primary uses of magnesium are summarised in table 1.

Table 1. Primary uses of magnesium.

Magnesium in Aluminium Alloys

In aluminium alloying, magnesium is added for strength, stiffness and durability. It also improves the resistance of aluminium to corrosion, particularly in the manufacture of thin sheets. The amount of alloying varies between 1% and 10% depending on the specification and end use. These include the 5000 series containing 5.5% magnesium, the 7000 series ‘aerospace alloys’ containing 3.5% and the 5141 alloy used in beverage can bodies containing 1.1% magnesium.

Other Uses of Magnesium

In desulphurising iron and steel, magnesium combines with impurities such as sulphur. Lower quality magnesium can be used as can scrap metal. Other uses include metal reduction, as in titanium, forming nodular iron, in sacrificial anodes in steel pipelines and in the production of magnesium chemicals. This market is growing at around 3% per year.

Magnesium Die-Casting

Automotive Applications

However, the fastest growing market for magnesium is in die-casting, particularly for vehicle components, Here, high quality magnesium is used in fabrications and castings that offer strength and weight reduction.

Growth in Magnesium Die-Casting

Last year some 130,000 tonnes of magnesium metal was used in die-casting. During the past decade alone the growth in die-cast magnesium has been on average 16% per year, and growth is predicted to remain in double figures for the next decade.

Production of High Quality Magnesium for Die-Casting

Die-casting requires consistent high quality magnesium, at present only provided by western producers. In the past the majority of western magnesium production used magnesium-rich brines that were evaporated into magnesium chloride. The dried compound was processed in an electrolytic cell recovering metal and chlorine gas. More recently cost-effective techniques have been developed using mineral resources, for example magnesite, containing up to 40% magnesium. By dissolving in hydrochloric acid, and recycling energy and chemicals via the electrolytic cell, lower production costs were promised - US$1/lb from brine-based plants to 50-60c/lb from the magnesite-based projects.

Magnesium Projects Around the World

Stanwell in Australia

The largest of these new generation plants is Australian Magnesium Corporation's (AMC) 90,000 tonne per year plant at Stanwell in Queensland. This plant, based on new CSIRO technology, used Queensland’s extensive magnesite (magnesium carbonate) deposits as the resource. Although tested in a pilot plant for several years the project ran into trouble due to escalating construction costs. Estimated costs rose to AUD$1,500 million, way above agreed loans and available equity capital. And although strong offtake agreements with Ford Motor Company were in place the company had no option but to place the half-built plant on care and maintenance.

Metallurgie Magnola in Canada

Metallurgie Magnola (Noranda 80%, Societe Generale de Financement 20%) has also put its plant on care and maintenance. The plant, at Danville, Quebec, with a nameplate capacity of 58,000 tonnes per year, began operating in 1998 after years of research by scientists at the Noranda Technology Centre. The centre developed a technique to extract magnesium from serpentine tailings existing in huge quantities near the plant. Similar to Stanwell it uses acid extraction and extensive recycling of energy and materials. In March 2003 Bob Sippel, President of Metallurgie Magnola, confirmed it would be idling its magnesium plant for an indefinite period. ‘The plant will be shut down until the price of magnesium increases and the resumption of operations is financially justified,’ he stated. The main reason for this announcement is the effect cheap Chinese magnesium is having on the magnesium market.

China

China now produces more than half the world’s magnesium metal. All of Chinese production is from Pidgeon plants that use ferrosilicon as the reductant. This process, invented during World War Two by Canadian Dr Lloyd Pidgeon, is simple and has low capital costs. It is a batch process considered uneconomic in the west, but it enables Chinese magnesium plants to be constructed and commissioned in a period of time measured in months, rather than years as at Stanwell and Danville. Magnesium plants producing up to 2,000 tonnes per year have been built with capital costs estimated to be around 10% of new generation electrolytic plants, with comparable operating costs.

The Effect of ‘Cheap’ Chinese Magnesium

London-based Metal Bulletin Research (MBR), who continually monitor the market, believe that Chinese magnesium has both directly and indirectly contributed to the collapse of the primary supply base of the western world. For the Chinese producers this is a double-edged sword. While they can produce significant quantities of ‘cheap’ magnesium for western consumers, concerns over quality and the environmental impact of some of the smaller plants is leading the Chinese government to impose tighter restrictions on them, and in some cases actually force the closure of plants altogether. A recent assessment of the market deduced that there were some 250-300 plants producing magnesium metal in various forms in China. MBR believes that this is probably on the low side, with many smaller plants not counted in the survey.

The Future of Magnesium Market

Looking at the future of the magnesium market, two issues still remain:

Quality - although this has improved in China there is too much variation between batched-processed Chinese magnesium to allow use in die-castings in safety-related applications such as vehicles or aerospace.

Cost - for western producers Pidgeon operating costs are higher than electrolytic because of the energy required, first to make the ferrosilicon reductant and then to follow it with another energy-intensive process to produce magnesium metal. Feasibility studies for electrolytic plants identified power costs of around 2.25c/kWh to keep production costs at 50-60c/lb. Chinese power supply, and its interrupted nature, favours the batch process. However, this power has to be of very low cost to maintain current Chinese production that sells at US$1,200-1,300 per tonne on the open market. Other users of electricity in China in the future may be able to pay more than magnesium manufacturers.

Summary

In MBR’s view the magnesium market is undergoing a quantum change in dynamics. The structure of the Chinese industry prevents the production of a standard quality magnesium. Western producers can supply quality-assured magnesium but at a higher price. However, the financial markets see lower-priced Chinese magnesium as a threat to investment in new western plants.