By Anthony Fensom
Silica’s growing nominations as a critical mineral have given project proponents a boost amid escalating demand from the solar energy industry. With a number of new projects in the pipeline, Australian miners are anticipating a bright future for the mineral seen as essential to global decarbonisation.
On 20 June, the Minister for Resources, the Hon. Madeleine King MP, announced a new Critical Minerals Strategy aimed at making Australia ‘a globally significant producer of raw and processed critical minerals’, including silicon.
Some $500 million of new investment into critical minerals projects is planned via the Northern Australia Infrastructure Facility, with additional finance available via the Critical Minerals Facility and the National Reconstruction Fund.
Just a week later on 27 June, the Queensland Government announced its own critical minerals strategy, aimed at overseeing $245 million of investment into the state’s critical minerals sector.
Importantly, silica was nominated (among other critical minerals), with the Queensland Government suggesting the possibility of forming a Critical Minerals Zone around Cape Flattery in Far North Queensland, focused on silica.
Just a few months later in August 2023, the Western Australian Government released its own report – Western Australia: A Global Battery and Critical Minerals Hub. Silicon was listed among other critical minerals as being key in the production of renewable energy and electronics.
Neil McIntyre MBE, CEO of emerging silica sand miner Diatreme Resources, says that the critical minerals push could provide an important boost to the company’s projects near Cape Flattery, including its emerging Northern Silica Project.
‘Diatreme welcomes the Queensland Government’s Critical Minerals Strategy, which highlights the potential for critical minerals, such as silica, to advance the global energy transition and power decarbonisation,’ says McIntyre.
‘Our Northern Silica Project, near Cape Flattery, will help advance this strategy, including the potential creation of a critical minerals silica hub and supporting by policy, open-access export infrastructure. This will help drive development of a mineral vital to the solar power industry, unlocking value for the people of Queensland, including First Nations communities.’
Another Queensland silica sands miner, Metallica Minerals, also welcomed the new Queensland Government strategy, noting that Queensland Premier Annastacia Palaszczuk had highlighted Cape Flattery in her speech to the World Mining Congress announcing the new policy.
Solar to outpace oil
Australia’s emerging silica sand miners have received another boost, this time from the International Energy Agency (IEA).
In May 2023, the IEA announced that global investment in clean energy was on course to reach US$1.7 trillion in 2023, eclipsing the US$1 trillion being invested in coal, gas and oil.
‘For every $1 invested in fossil fuels, about $1.7 [is] now going into clean energy. Five years ago, this ratio was one-to-one,’ IEA Executive Director Fatih Birol said in a 25 May announcement. ‘One shining example is investment in solar, which is set to overtake the amount of investment going into oil production for the first time.’
The IEA’s World Energy Investment 2023 report cited solar power as a ‘star performer’, with more than US$1 billion per day expected to be invested in solar in 2023 – eclipsing spending in upstream oil for the first time.
In a June 2023 report, the IEA noted that solar PV manufacturing capacity would more than double by 2024, reaching an estimated 1000 gigawatts. While China has dominated the industry, the report noted that governments in the United States, Europe and India had begun to put priority on solar photovoltaic (PV) supply chain diversification.
High-purity silica sand is a key ingredient in solar panels, with 70 per cent of the glass in such panels made from this material, according to the World Bank.
‘Every one million tonnes of high-quality silica mined from Diatreme’s projects could be used to produce around 103 million solar panels, providing the equivalent emissions savings of taking 4.25 million cars off the road,’ McIntyre says.
Australia’s emerging silica sand miners are advancing new projects, targeting the anticipated demand growth for the critical mineral.
In June 2023, Diatreme announced a positive scoping study for its Northern Silica Project, showing its potential to become a long-life operation, supplying premium-quality, low-iron silica sand to the PV glass market.
The study estimated a pre-tax net present value (NPV) of $1.4 billion, and an internal rate of return (IRR) of 33 per cent over a 25-year mine life.
In July, Diatreme announced an offtake memorandum of understanding (MOU) for the project with Flat Glass Group, which included the potential for onshore PV glass manufacturing in Queensland. The project was designated a ‘Project of Regional Significance’ in August, with Diatreme continuing to advance the regulatory approval process.
Nearby, Metallica Minerals announced a definitive feasibility study (DFS) for its Cape Flattery silica sand project in July 2023. The DFS estimated a pre-tax NPV of $437 million, and an IRR of 32 per cent over a
25-year project life. In June 2023, Metallica extended its offtake MOU with Japanese trading house Mitsui to September 2024.
In August 2023, Queensland’s Australian Silica Quartz Group announced the start of reverse-circulation drilling at its Queensland Quartz Hill project, seen prospective for metallurgical-grade silicon quartz lump feedstock.
Meanwhile, in Western Australia, VRX Silica announced the award of a mining lease for its Arrowsmith Brand silica sand project in July 2023, located 270 kilometres north of Perth. The company aims to construct a two-million-tonnes-per-year silica sand processing plant at Arrowsmith North, adding to its Arrowsmith Central and other silica sand projects in Western Australia.
Elsewhere, in June 2023, Perpetual Resources reported ‘significant progress’ in environmental approvals for its Beharra silica sand project, located 300 kilometres north of Perth.
In the same month, Suvo Strategic Minerals reported the sale of silica sand produced as a by-product of its hydrous kaolin plant in Pittong, Victoria.
With the silica sand market picking up steam, more new projects are likely to come into production as Australia builds a key position in supplying this fast-growing critical mineral.