Scandium Expert Says Airline Industry Stands to Reap Hundreds of Millions of Dollars in Annual Savings by Integrating Scandium Alloys into Commercial Jetliners
CENTENNIAL, Colo. (October 5, 2017) – A new analysis by a specialty metals expert finds that scandium-contained aluminum alloys can deliver in the range of $9 million in net present value savings to airline operators for every mid-body airliner because of the metal’s ability to lightweight jets, reduce or eliminate the use of rivets, and reduce fuel consumption.
Further, the analysis shows that integrating aluminum-scandium alloys could allow aircraft manufacturers to boost annual revenue by hundreds of millions of dollars per year through lower materials costs, lower direct manufacturing costs, and higher manufacturing throughput.
The analysis was published by Dr. Andrew Matheson, President of OnG Commodities LLC in an article here. Dr. Matheson is an expert in niche metals including scandium and tantalum.
According to Dr. Matheson’s analysis:
“Scandium can save airlines money because it can eliminate the need to rivet aluminium components. Scandium acts to stabilise the grain structure in the vicinity of welds, meaning aluminium parts can be welded quickly and efficiently. This in turn means that aircraft can have thinner skins in some locations, and can eliminate the weight of rivets wherever scandium-doped aluminium alloys are used.
“For a B737 flying 3250 hours per year, and using American Airlines' cost of capital and the US EIA projections for future fuel price inflation, the present value of fuel savings driven by scandium alloys, assuming a 15% aircraft weight reduction, amounts to a little over $9 million. The cost of added scandium, at a price of $3,500/Kg oxide, and assuming an average 0.7% by weight scandium doping level, is around $800,000 – a savings to cost ratio of 11:1. For a wide body jet, flying perhaps 5000 hours per year, the savings in avoided fuel burn can be dramatically larger.
“Scandium alloys can also offer a range of cost savings to airframe manufacturers. The most obvious is a reduction in the bill of materials: fewer rivets (of which there are hundreds of thousands on large jets) means a substantial reduction in the variable cost of manufacturing. For Boeing and Airbus, this would amount to tens of millions of dollars per year in lower bill of materials costs.
“In general, welding is faster than riveting, and while rivets and fasteners will still be important wherever galvanic corrosion in multi-material structures is a factor, elimination of rivets means on balance a lower direct manufacturing cost, both machine time as well as direct labour to measure and repair riveting. Reductions in direct costs are once again likely to run into the tens of millions of dollars per year.
“To the degree welding speeds the production line, there are also substantial potential benefits from reduced throughput time. For a large aircraft manufacturer, increasing output by 1% could mean several more aircraft per plant per year, with a better absorption of fixed costs and consequently increased profitability.
“Finally, faster throughput means more product to sell. A 1% increase in the annual production of a narrow body jet is worth in the range of $500 million revenue to the OEM, regardless of any value to be obtained from sharing the benefit of fuel savings.
“Overall, then, the impact on profitability for the aircraft manufacturing industry can be substantial - in the range of $0.5-1 billion per year through a combination of increased revenue and reduced cost. This is a large number, roughly equal to the amount of scandium needed (say 200-300 tons per year of oxide, assuming efficient recycling) at today's oxide price. Depending on the specifics of OEM operations scandium could end up paying for itself in passenger aircraft regardless of how fuel savings are allocated between OEMs and airlines.”
Dr. Matheson also noted that “other transportation markets represent a third potential demand source for scandium, particularly in electric vehicles (where weight reductions can lead to savings in battery cost) as well as lower temperature service as a replacement for titanium. These markets are more fragmented than aerospace but represent substantial potential, and will grow further as innovation reduces scandium intensity in aluminium alloys.”
Further, he wrote, “The corrosion properties of scandium mean the metal can permit aluminium to replace titanium in lower temperature service (say below 300C), where corrosion is the key requirement. Examples might include truck turbochargers.”
He concluded: “Overall, scandium can have a dramatic impact on cost in transportation, whether because of the ability to reduce weight, or the ability to speed production lines. Moreover, it is likely that scandium alloys can be optimised in time to achieve today's performance at lower levels of scandium. Paradoxically, this may in the end lead to higher scandium usage and even, perhaps, higher per-Kg prices for scandium oxide.”
On Behalf of the Board of Directors,
Executive Chairman, CEO, and Director
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Source: NioCorp Developments Ltd. (TSX: NB, OTCQX: NIOBF, FSE: BR3).
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NioCorp is developing a superalloy materials project in Southeast Nebraska that will produce Niobium, Scandium, and Titanium. Niobium is used to produce superalloys as well as High Strength, Low Alloy ("HSLA") steel, which is a lighter, stronger steel used in automotive, structural, and pipeline applications. Scandium is a superalloy material that can be combined with Aluminum to make alloys with increased strength and improved corrosion resistance. Scandium also is a critical component of advanced solid oxide fuel cells. Titanium is used in various superalloys and is a key component of pigments used in paper, paint and plastics and is also used for aerospace applications, armor and medical implants.
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