Rio Tinto, Canada to advance domestic scandium production

Rio Tinto (ASX: RIO) and Canada Growth Fund (CGF) have announced a transaction to advance the Canadian production of scandium oxide at a facility under construction at Rio Tinto’s critical minerals and metallurgical complex in Sorel-Tracy, Québec.

CGF — a C$15 billion independent investment fund operating at arm’s length from the Government of Canada — will invest approximately C$25 million in North America’s sole facility capable of supplying the material, expanding the facility’s nameplate capacity to nine tonnes per annum and strengthening Canada’s critical minerals supply chain.

Scandium is a rare and strategically important metal, essential for high-performance aluminum alloys, solid oxide fuel cells, and a range of new and emerging technologies. It is considered a critical mineral by countries including the United States, Canada, Australia and the European Union.

In 2022, Rio Tinto became first the North American producer of scandium oxide. The US Defense Logistics Agency recently said it is seeking to buy up to $40 million of scandium oxide over the next five years from Rio for the national stockpile.

Rio Tinto’s demonstration plant currently accounts for the entirety of North American scandium supply and is one of the few meaningful sources of supply within the Organisation for Economic Co-operation and Development.

Rio Tinto said it has pioneered a breakthrough process to extract and produce high-purity scandium directly from the waste streams of titanium dioxide production at its Québec operations, eliminating the need for additional mining and minimizing environmental impact.

Scandium’s strategic importance will continue to grow as global industries advance toward electrification, carbon neutrality, and the utilization of high-performance materials, Rio said.

The global market for scandium remains small, with China producing most refined scandium globally.

“Rio Tinto is pleased to partner with CGF and the Government of Canada to expand our Canadian production of scandium oxide, a high-performance material used for advanced manufacturing and energy generation,” Rio Tinto Iron & Titanium and Diamonds managing director Sophie Bergeron said in the statement.

“This project leverages an innovative process developed in Canada by our scientists, fully supplied from our domestic mining and metallurgical assets to provide a secure, North American supply of this critical mineral,” Bergeron said.

“With its unique investment mandate, CGF invests into innovative transaction structures that directly support projects of strategic priorities,” CGF investment management CEO Yannick Beaudoin added.

“This transaction, completed alongside an established operating partner, enables us to unlock new models for risk-sharing and value creation that advance Canada’s supply chain resilience strategy.”