Sumitomo Metal Mining will build the Philippines’ first rare earths recovery facility on a Palawan Island site if a pilot plant is deemed successful.

The company’s subsidiary Coral Bay Nickel Corporation (CNBC) holds the project site where it produces nickel-cobalt mixed sulphide by using high-pressure acid leach (HPAL) technology, and small amounts of scandium are contained in the ore.

Sumitomo’s president Nobumasa Kemori says the company has been working to develop a scandium recovery method at its Niihama Research Laboratories in Ehime Prefecture, Japan, for some time. “This effort has not led to the attainment of technology enabling efficient recovery of scandium from the nickel-cobalt mixed sulphide production process.”

The company says it has scheduled construction of the scandium oxide pilot plant by the end of 2013 for trial production to commence at a level of 10kg per month in 2014.

“Based on the results of test operation of the pilot plant, the company will aim for construction of a scandium oxide production line of commercial scale and the launch of a related business in 2015,” Nobumasa Kemori says.

Scandium is a rare earth element used across a variety of applications such as an additive to enhance the strength, heat resistance and corrosion resistance of aluminium, as an electrolyte used in solid oxide fuel cells, and as an electrode in metal halide lamps and alkaline batteries. Annual global production of scandium is estimated at 10 tonnes. Major producers of the rare earth element are the United States, Ukraine, Russia and China.

Senior vice-president of CNBC shareholder Nickel Asia, Emmanuel Sampson, says the ore being supplied to CNBC comes from its Rio Tuba Nickel Mining operations adjacent to the CNBC plant. “If the CNBC pilot plant is successful, it will represent the country’s first production of a rare earth element, an important step in the development of the Philippines’ mineral resources sector.

“It is also anticipated that if successful, a similar process to recover scandium oxide will be used by another Sumitomo subsidiary Taganito HPAL Nickel, which is constructing the country’s second HPAL plant (THPAL) in Taganito, Surigao del Norte,” he says.

Construction of the THPAL plant is nearing completion and will be commissioned shortly, sourcing its lateritic nickel ore from Taganito Mining.

Sumitomo believes there is major growth ahead in the scandium market, as supplies stabilize, citing modest volumes of production and high costs for limiting the sector.