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Magnesium - Is it the metal of the future?

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Magnesium is the lightest of all structural materials, the 8th most abundant element on earth and 100% recyclable. It delivers the best strength-to-weight ratio of any commonly used structural metal.

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Date Published: May 29, 2015
Transcript: Available

Video Transcript:

I’m Samantha Deutscher for InvestmentPitch Media.
Magnesium, a familiar household name, is being called the metal of the future by industry experts.
It is the 8th most abundant element, comprising about 2% of the earth’s crust, and the 3rd most plentiful element in seawater.
Although magnesium is found in more than 60 different minerals, only a few are of commercial importance.
Magnesium and other magnesium compounds are also produced from seawater and lake brines.
According to the U.S. Geological Survey, historically, the leading use for primary magnesium metal was aluminum-base alloys that were used for beverage can packaging, transportation, and other applications, which accounted for 35% of consumption.
30% was used as a reducing agent for the production of titanium and other metals, 15% for structural uses such as castings and wrought products, 10% for removing sulphur from iron and steel, and the balance of 10% for other uses such as waste water treatment, agricultural for feed and fertilizers, and food supplements.
While there are many uses for magnesium, the market is still relatively small.
This is expected to change as exciting new developments create new markets for this extremely versatile metal.
The United States Automotive Materials Partnership, established in 1993 by Chrysler, Ford and General Motors, believes magnesium can make a paradigm shift in how vehicles are conceived and assembled.
In its “Magnesium Strategic Vision Report” it proposed reducing vehicle weight by 15%, substituting 340 lbs, of magnesium components for 840 lbs. of steel, aluminum and plastic parts.
As these pictures show, there appears to be almost no limit to the parts that can be produced with magnesium.
This is entirely feasible when you consider that magnesium is 33% lighter than aluminum, 60% lighter that titanium, and 75% lighter than steel, and in many applications it is stronger per unit volume than these 3 structural metals.
There are also magnesium-ion batteries under development, which some researchers say could potentially replace lithium-ion batteries.
On the supply side, it is the common story, with China producing more than 80% of world supplies, which led to anti-dumping charges, with the United States currently imposing hefty import duties on foreign magnesium.
According to the USGS, the U.S. spot price for magnesium averaged $2.15 per pound at the end of 2014, with the China free market price averaging $2,500 per metric tonne.
The most formidable challenge to using more magnesium in North America is its higher cost versus other materials, primarily due to its high cost of production, particularly energy costs.
Amid concerns about a steady supply of magnesium, at more reasonable prices, some car makers have avoided investing heavily in producing magnesium-based parts.
There are, however, a couple of potential game changers on the horizon, which could help reduce the pricing for auto manufacturers, thereby dramatically increasing magnesium’s share of the market.
The U.S. Department of Energy is funding a project for recovering magnesium from seawater using less energy than current methods.
Vancouver based Mag One Products is acquiring intellectual property that promises to produce magnesium metal and compounds in an environmentally friendly manner at prices significantly lower than current alternatives.
We believe investors should take a closer look a magnesium.
I’m Samantha Deutscher for Investmentpitch media.