Separating Facts and Fiction in the Rhenium Market

President Kennedy said:

The great enemy of the truth is very often not the lie deliberate, contrived and dishonest, but the myth persistent, persuasive and unrealistic

Perhaps the small subject of Rhenium is too minor a matter to be coupled to the high minded philosophy of this quote, but I use it to explain the reasons behind my recent talk at the Minor Metals Trade Association (MMTA) conference in Philadelphia on May 4th.

Taking the starting point of high prices of up to $12,000 per kg for Rhenium in August 2008, I wanted to look at two areas of potential myth – firstly, producer promises measured against real outcomes and secondly, technologies which GE and others said would reduce Rhenium dependence.

Looking back at 2008 it is easy to see that high prices acted like a beam of light trained on this small market, attracting miners and recyclers to make ambitious projections. It was of course easier to issue press releases announcing new Rhenium production, than to actually produce the stuff. Ivanhoe Australia, I felt, was the main perpetrator with numerous announcements about their ‘unique discovery’, ‘the highest Rhenium content in the world’, ‘the first example of a Rhenium ore’ and mention of ‘7mt per year output’ which on a market of no more than 45 mt primary supply would certainly have made some impact.

The fact is that Ivanhoe is indeed unique. Its primary molybdenite deposit has surprisingly high contents of Rhenium, approximately 1000 ppm in MoS2. But the leap from this to output of usable units is a road less travelled. To date, the status at Ivanhoe is that although they have raised funds from the market and purchased an ore crushing plant, no roaster is yet built nor a Rhenium circuit. In simple terms, the 7 mtpy is a long way off. Others were guilty of similar claims – Xstrata’s Altonorte said they would produce Rhenium at one of their two roasters in Chile, Antofagasta said they would set up their own patented process, Codelco said they would revive their old circuit at Chuquicamata and Kennecott were hoping to be in production at Bingham Canyon. Of all the promises made, Kennecott’s RTZ, who invested more than $250 mln in a molybdenum autoclave process (MAP) hopes to start production in the last quarter of 2012, Codelco and the others have not advanced. Only Ecoren in Poland have performed to plan, building their hydrometallurgical plant in Legnica and now able to produce either Rhenium pellets or APR to a total of about 4.5-5.5 mtpy. But even here ideas of expansion beyond this limit are not possible.

Recyclers kept their promises much better. In Germany Buss & Buss have a working system, as do Neo Materials Technology at Napanee in Canada, Colonial Metals in Atlanta, CP Rhenium in Pennsylvania and others in Estonia and Russia. But Johnson Matthey, who in 2005 announced at a Ryan’s Notes conference that they would be a dominant force in the market for recycling, has exited completely. It became clear that the industry for recovering Rhenium from nickel alloy casting scrap, or widely dispersed used blades, was no job for large corporations but something best done on small scale by private companies.

So much for the producers. On the technologies front, the threats and rumours were of a different order. Out ahead was GEs claim, published in the Jan 2010 edition of the Journal of Metals entitled ‘Rhenium reduction – alloy design using an economically strategic element’ which included the phrase ‘Rhenium may be reduced in gas-turbine engines’, and which announced the development and application of their N515 alloy (Re 1.5%) and Re N500 (Re 0%). The phrase that bothered me when I first read the piece and still bothers me today was the statement that ‘N515 and Rene N5 (Re 3%) are similar in oxidation resistance at 1175°C’. True as far as it goes, it does not say enough about the larger engines such as Trent 1000 or XWB or GeNX or others where turbine inlet temperatures are said to be as high as 1650°C. It may well be true that engines using N515, used in high cycle aircraft, such as the A320 or Boeing 737 could operate with such alloys present in the high pressure turbine (HPT) but the downsides of likely higher NOX emissions, reduced longevity, higher maintenance costs, reduced fuel efficiency suggests wide commercial introduction to be very unlikely. The danger of the half truths peddled here are that it distracts the eye of one of the main exponents and users of Rhenium from the task in hand – namely reaching out to the market to manage this rare metal rather than pretend to a lack of dependence. Indeed it could be said that the period of low prices following the Lehman Brothers financial crash were the ideal opportunity to build stock and start serious discussions whereas, instead, this time may now be passed.

But GE are not alone in suggesting ways in which Rhenium’s prime use might at some point be dented. The other threats suggested include the wider use of Ceramic Matrix Composites (CMCs) Metal Matrix Composites (MMCs), the Pratt & Whitney Geared Turbofan, the Propfan (sometimes called the Un-ducted turbofan) and the use of Ruthenium. Taking each of these subjects quickly, but not necessarily in order – Ruthenium promotes the use of Rhenium and the gamma prime phase in single crystal alloy – it does not reduce the amount of Rhenium required. PWs geared turbo-fan is a means to optimize the rotation speed of the front fan in relation to the low pressure turbine, and will not affect the HPT. The main issue with the Propfan is noise and as a result the problems of landing and take-off over conurbations make the use of such engines unlikely, and CMCs and MMCs are many years off. From these it is possible that the Propfan could indeed provide an engine alternative if noise problems can be overcome but it is not clear if any less Rhenium would be used in the HPT. Out of the two forms of composites CMCs, where ceramic or metal fibres are knitted onto a ceramic matrix, are being tested on some stators/vanes in military aircraft and represent a possible development within the next 20 years.

The final myth worth examining and dispatching is the subject of long terms contracts at fixed prices (LTAs). Existing for 20 years or more, these schemes devised between the world’s largest producer and its customers can perhaps be credited with the way in which Rhenium has made such successful inroads into aero-engine design. However, as a means of satisfying the producer in terms of price it has been a failure, with some long term contracts, according to published figures from Banco Central Do Chile, still showing a fair proportion of deliveries not much more than $2000 per kg (less than half the current market). Pressure on the world’s largest producer from the miners who generate the Rhenium within their molybdenite to pay a clear rhenium credit, means that sale prices in the future will have to be made on the same basis as intake. Effectively, this means prices as published in journals and, amongst others, those quoted by MetalPrices.com will form a basket of objective pricing on which all future business in Rhenium will be conducted. These quotes are already used daily in relation to recycle deals and are being used more and more for current Rhenium metal pellet business. Some producer contracts and, in future, possibly all contracts for the supply of Rhenium will be on such bases and therefore the liveliness and veracity of them will become ever more important.

‘The great tragedy of science’, as T.H.Huxley said, was ‘the slaying of a beautiful hypothesis by an ugly fact’. I hope with this article to have slain a few myths and established a few facts.

Anthony Lipmann Lipmann Walton & Co Ltd

Based on talk given at MMTA conference Philadelphia May 5th 2011.Article published www.metalprices.com