Inside Robert Friedland's Green Miracle Company
CleanTeQ's CEO Sam Riggall is fine-tuning plans to create the first in a new generation of mines that promise to reinvent the industry
Sam Riggall, 45, a Twitter-savvy wonderkid former lawyer from Rio Tinto, has worked out a fail-proof way to measure the impact that scandium will have on the global green economy.
A rare element discovered by a Swedish chemist in the 1870s, scandium can be used to make ultra-lightweight, weldable alloys, meaning aerospace manufacturers could say goodbye to rivets, cutting tonnes off a plane's weight in the sky and millions of dollars off its fuel bill. But with only ten tonnes of scandium produced each year, primarily as a byproduct from uranium, and with quoted prices varying between $1,800 to $4,000 per kilo, the market is too small for aluminium groups to justify investing in scandium alloys.
Riggall plans to square that circle by spending one to two billion dollars (money he does not have yet), building the world's first scandium mine in a field in New South Wales. Adding 80 tonnes to global supply each year, he wants to jumpstart a new market (that his shareholders will then largely control).
“If you can take a kilogram out of the weight of an aircraft, that equates to about a million dollars of fuel saving over the life of the aircraft,” Sam Riggall says from his office in Melbourne, on a bland industrial park lined with eucalyptus trees on the edge of the city's university campus. “The numbers are huge.”
Riggall's company, CleanTeQ, which is backed by mining billionaire Robert Friedland and Chinese real estate tycoon Jiang Zhaobai, has a team of engineers fine-tuning plans for the mine, which will use self-driving trucks, technology used for softening water and an off-grid power plant to create the world's most futuristic mining operation. In addition to scandium, CleanTeQ will also pump-out battery grade nickel for the next forty years, plus 14 tonnes of cobalt per day, equal to 4 per cent of the global market.
Its designs are still on the drawing board. But after a A$150m ($115m) capital raise by the company last month, CleanTeQ looks set to build the first in a new generation of mines that promise to reinvent the industry, as mining companies morph into tech outfits and as competition in the industry shifts towards intellectual property and patented engineering.
CleanTeQ has spent nearly 20 years tweaking its “ion-exchange” technology, which uses tiny polymer balls to pull impurities out of water, to instead fetch nickel and cobalt out of vats of dissolved metal. Heat given off by sulphur in the plant will produce enough steam to power CleanTeQ's entire operation, Riggall says. “In the first five to ten years, we expect to be almost completely self-sufficient.”
Riggall, who describes CleanTeQ's plant as “one big chemistry set”, first tried to license the technology when he was working for Rio Tinto. Having led Rio's negotiations with Mongolia over the giant Oyu Tolgoi copper mine, he joined CleanTeQ when Friedland invested in the company five years ago. “Robert rang me
one morning to ask about this company and I knew that the technology was excellent.” Since then, the shares have gone ballistic, rising tenfold to A$1.14, vaulting the company to a A$935m market cap.
Capital-heavy mining firms across the industry are increasingly trying to become fleet-footed and tech-savvy, and whilst they remain some way short of the billion-dollar patent wars that dominate the mobile phone sector, CleanTeQ is far from the only company investing in racy new types of metal processing technology.
Mining giant BHP, which has previously worked with CleanTeQ, recently spent $43m on a new plant to prep its nickel for the electric battery market, diverting it away from stainless steel. Its former subsidiary Metalysis, based in the UK, meanwhile raised $17m earlier this month to invest in 3D-printing, hoping to create a vast new market for metal powders. “In this new commodity landscape, incumbents and attackers will race to develop viable business models,” says McKinsey & Co, the consultant, “and not everyone will win.”
In an optimistic nod to the freaky ideas they hope to come up with, companies are even trademarking their business divisions. In 2008, Rio Tinto trademarked “Mine of the Future”, which has rolled-out 80 driverless trucks in Western Australia, shifting a quarter of the group's iron ore. Anglo American followed suit last year, trademarking “FutureSmart Mining”, which is working on “swarm” robotics, sending fleets of vehicles instead of people into its deepest platinum mines.
But when it comes to dream-catching, CleanTeQ is out in front. Its snazzy new plant will be built on the largest cobalt resource outside Africa. At peak capacity, it will be run by 200 to 300 staff, many of them based offsite in a remote operating centre in Parkes, a small town that also houses Australia's key space observatory. CleanTeQ's corporate bumf meanwhile looks like it is trying to sell an upmarket electric sedan. “You have to flick through fifty pages to realise there's a mine in there somewhere,” one rival executive says.
Any scepticism the company can handle. Where it counts, in China, the world's largest and fastest-growing electric car market, Sam Riggall and Robert Friedland are taken entirely seriously. In January, CleanTeQ signed a partnership with aluminium giant Chinalco and the University of Chongqing to design and test new scandium alloys. The agreement is part funded by Beijing's Ministry of Science. Riggall's corporate lingo (he is working on an “implementation plan” to “accelerate the delivery of metal units”) even has a hint of Beijing about it.
Construction at CleanTeQ's plant is meanwhile due to begin this year, with first shipments in 2020. For Riggall, the scandium market cannot arrive soon enough. “Companies that require high performance alloys have known about scandium for decades,” he says. “There's just never been enough material to ever satisfy the market.”
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