From aerospace alloys to sporting equipment to automotive parts, there are plenty of uses for magnesium in modern life. What’s more, applications for the metal are growing, which could be good news for magnesium stocks.
For example, a prior ban on the use of magnesium in airplane seating was recently lifted in the US, bringing magnesium alloy producers such as Magnesium Elektron a little closer to getting their products into US aircraft. Beyond that, some have suggested that recent research into magnesium battery prototypes may allow magnesium batteries to become more widespread.
Looking at supply, Chris Berry of House Mountain Partners and the Disruptive Discoveries Journal has noted that the majority of the world’s magnesium is currently produced in China, and, as with other industrial metals, there is no formal magnesium market. Furthermore, an economic slowdown in China does not bode well for secure magnesium supply.
Given those factors, magnesium could be a good metal for investors to look into. For those interested in the future of magnesium and in junior magnesium stocks, here’s a look at a few companies in the space and what they’ve been up to lately.
Junior magnesium stocks
Nevada Clean Magnesium is developing its Tami-Mosi dolomite project in Nevada, and has a joint venture agreement with ScanMag, a Norwegian industrial minerals company. The companies will work together to establish a separate technical development company to test magnesium processing proof of concept through a Norwegian subsidiary.
At the start of October, Nevada Clean Magnesium contracted Lindon Acres Enterprises to build a bench-scale pilot furnace for magnesium production.
West High Yield Resources is developing its Record Ridge South magnesium project in British Columbia, and completed a preliminary economic assessment for it in June 2013. Most recently, West High Yield received approvals for two 10,000-tonne bulk sample permits for its Record Ridge and Midnight projects.
Mag One Products (CSE:MDD)
Mag One is focused on magnesium production technologies rather than mining magnesium. The company is aiming to use its proprietary technology to become “the world’s lowest-cost producer of 99.9 percent pure magnesium (Mg) metal ingots and ultra-pure magnesium compounds.” Its target operating cost is at least 25 percent lower than that of current magnesium producers.
MGX is focused on magnesite rather than magnesium specifically. Magnesite is used to produce three products that are important for industrial end users, including caustic calcined magnesia (CCM), dead burned magnesia (DBM) and electrofused magnesia (EFM). Currently, MGX is developing its Driftwood Creek magnesium property in British Columbia, but it also holds the Fran gold property as well as other magnesite properties in North America.
As with West High Yield, MGX recently received a permit for extracting bulk samples from Driftwood Creek from the British Columbian government.
Korab Resources (ASX:KOR)
Another company focused on magnesite rather than magnesium, Australia’s Korab Resources also holds gold, silver and phosphate projects. Its Winchester magnesite project is located 75 kilometers south of the port of Darwin in Australia. Korab was granted its mining lease for the Winchester project this October, and on November 4, the company signed a heads of agreement for the offtake of 1.5 million tonnes of magnesium carbonate from the project.
Private magnesium companies
American Magnesium is aiming to develop a magnesium alloy complex in New Mexico, including an estimated billion-ton dolomite deposit averaging 20.7 percent magnesium oxide with no overburden.
Another technology company, MagPower systems is developing its own magnesium-air fuel cell technology. The tech is still at an early stage, but magnesium-air batteries have several advantages over other battery types: they have a higher energy density than other systems, meaning more electricity for less weight, and they also produce no toxic by-products, unlike their lead and lithium counterparts.
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
Editorial disclosure: Nevada Clean Magnesium, West High Yield Resources, MGX Minerals and American Magnesium are clients of the Investing News Network. This article is not paid-for content.