Metals and Alloys

Magnesium Car Parts: Cost Factors (Part 2)

05 December 2017

Figure 1 - Cost profiles for U.S. magnesium, aluminum and titanium production based on ARPA-E analysis. Source: U.S. DOEFigure 1 - Cost profiles for U.S. magnesium, aluminum and titanium production based on ARPA-E analysis. Source: U.S. DOEMagnesium’s higher price compared to steel or aluminum is limiting wider adoption in the cost-sensitive mainstream automotive market. While magnesium and aluminum are equally abundant elements in the earth’s crust, magnesium is currently more expensive to reduce or produce compared to aluminum. New developments on the horizon may change that.

Virtually all of the magnesium automotive parts today are die cast from a primary metal source such as magnesium ingots or casting stock. Primary metal costs are compared in Figure 2, which is based on data from the United States Geological Survey (USGS). Secondary magnesium is produced from recycled scrap and is another source of magnesium die casting ingots.

Figure 2 - 2016 U.S. spot Western production cost average. Source: USGSFigure 2 - 2016 U.S. spot Western production cost average. Source: USGSMagnesium is recognized as a "metal of the future," and demand is expected to increase by 5 percent each year for the next five years even with material prices higher than alternative materials.The price instability of raw magnesium also inhibits broader use. In October 2017, the price of magnesium was $2.10/lb, but the price has peaked to $2.72/lb according to Investing News. The price of magnesium is impacted by the demand for aluminum, titanium and steel because magnesium is used to make these metals. In fact, the leading use of primary magnesium metal (consuming of 33 percent in the U.S.) is a reducing agent for the production of titanium. Another 30 percent of the primary magnesium in the U.S. ends up as an aluminum alloying constituent. 14 percent of U.S. magnesium goes into steel production for desulfurization. Only 18 percent of the primary magnesium is used for structural applications (castings and wrought products).

Magnesium is the eighth most abundant element in the earth’s crust, so why isn’t lower-cost magnesium available in the U.S.? Eighty percent of the world’s magnesium supply is made in China using the coal-fueled, environmentally unfriendly and labor-intensive Pidgeon process. Low-cost Chinese magnesium resulted in the shuttering of many Western magnesium facilities. U.S. authorities have restricted the use of Chinese magnesium in the U.S. through high countervailing duties. US Magnesium in Salt Lake City, Utah is the only active North American magnesium producer remaining. Several new magnesium producers are beginning operations in order to meet the growing U.S. and worldwide demand for magnesium, which should increase supply and reduce magnesium costs. Alliance Magnesium in Quebec, Canada has completed 140 days of magnesium production. Alliance Magnesium has a local raw material supply and a relatively inexpensive energy supply. Alliance plans to invest a total of $535 million to build a full-scale 50,000 tons/year magnesium metal production plant opening in late 2020. Latrobe Magnesium in Sydney, Australia completed a pre-feasibility study of a plant to produce 10,000 tons per year of magnesium from brown coal fly ash. Australia leads in the world in coal exports.

Figure 3 - Mag One magnesium production process using low serpentine magnesium silicate "ore." Source: USPTOFigure 3 - Mag One magnesium production process using low serpentine magnesium silicate "ore." Source: USPTOMag One Products Inc. in southwest Quebec is commercializing a game-changing patented magnesium production technology promising to provide primary magnesium at a cost equivalent to or lower than aluminum. They are projecting magnesium production costs of $1400 to $2400/metric ton ($.64/lb or $1.09/lb). The Mag One process was initially developed by Dr. James Blencoe, formerly from Oak Ridge National Laboratory (ORNL). The process uses a carbonization process to convert a low-cost magnesium silicate ore (Serpentine) to magnesium carbonate. The magnesium carbonate is reacted with hydrogen chloride to produce magnesium chloride, which is reduced to magnesium metal through electrolysis. If Mag One delivers on their promise to be the lowest cost producer of magnesium, then magnesium will soon become the go-to choice for the light-weighting automotive parts. The Mag One process also has the ability to sequester carbon dioxide, which is far better for the environment compared to Pidgeon process. While automotive OEMs have wanted more U.S. sources for magnesium, the high capital expenditure to build a new magnesium plant in the Mag One magnesium plant are modular and have is much lower capital expenditure or CAPEX compared conventional magnesium plants ($25 million vs. $1 billion).

Secondary forms (castings, rolled sheets, extrusions, forgings, etc.) of these alloys would have higher costs per unit weight due to the additional or “further” processing. The further processing cost for magnesium parts is typically lower compared to composite processing costs. Additional manufacturing costs can arise due to assembly, joining and corrosion protection requirements when using magnesium. While steel body-in-white (BIW) stampings can be robotically welded, a BIW with magnesium parts would require mechanical fastening or adhesive bonding. In addition, the joining method should electrically isolate the magnesium from other metals and protective coating should be applied to the magnesium parts to prevent galvanic corrosion. Vehicles and manufacturing processes must be designed to accommodate magnesium’s corrosion and joining constraints.

Environmental and Life Cycle Costs

Another cost factor to consider is the life cycle cost or the impact on the environment. OEMs are increasing being held responsible for the environmental impact or sustainability of their products. A study by the World Steel Association found magnesium, aluminum and carbon fiber production emissions are five to 20 times greater than steel manufacturing. The use of greenhouse gas-intensive materials in the effort to reduce vehicle weight and fuel consumption may counteract the reduced vehicle emissions benefits provided by lighter materials.

Figure 4 - Green house gas (GHG) emissions for the production of various materials. Source: World Auto SteelFigure 4 - Green house gas (GHG) emissions for the production of various materials. Source: World Auto SteelThe sulfur dioxide (SO2) and sulfur hexafluoride (SF6) gases limit oxidation during the production and casting or handling of molten magnesium. These gases are toxic and have a high greenhouse gas (GHG) potential. The U.S. and Europe are passing regulations to limit the use of these gases. Certain low GWP hydrofluorocarbons (HFCs) can be used in place of SO2 and SF6 gases. Many countries are phasing out the use of SO2 and SF6 gases in magnesium manufacturing facilities.

If automotive manufacturers are responsible or required to dispose of end of life vehicles in the future, then the recyclability of the materials will be a concern. Many manufacturers are increasing the “green-ness” and recyclability of their materials in order to improve sustainability and reduce environmental footprint or impact of their plants. Magnesium scrap can be recycled, but a system for collecting and recycling magnesium is not as well developed as the infrastructure for steel and aluminum recycling. The magnesium industry is working to improve the recycling and sustainability according to the recent report, “Magnesium Recycling in the EU." The need for increased recycling capabilities has been recognized. In fact, Advanced Magnesium Alloys Corporation (AMACOR), the largest magnesium recycling facility in the world, recently restarted a secondary magnesium plant with 25,000 tons per year of capacity.

The U.S. and the European Union legislatures have issues regulations to make cars lighter in weight to improve fuel efficiency and reduce emissions. In May of 2012, CAFE Standards originally introduced in 1978 were tightened yet again. By 2016, the CAFE Standard will be 35.5 mpg and 54.5 mpg by 2025. Vehicles not meeting the future fuel and emissions standards will incur the cost of the regulatory fines. Cars have been made more fuel efficiency and environmental friendly through down-sizing, new efficient or light-weighting designs (such as cab forward and front-wheel drive) and shifts to lighter materials. Magnesium offers even greater potential to reduce weight by displacing steel. Replacement of aluminum and plastics could provide incremental benefits as well.

Future of Magnesium in Automotive Applications

Figure 5 - American Foundry Society (AFS) 2017 Casting of the Year was Chrysler Pacifica Lift gate Inner die cast by Meridian. Source: MeridianFigure 5 - American Foundry Society (AFS) 2017 Casting of the Year was Chrysler Pacifica Lift gate Inner die cast by Meridian. Source: MeridianSeveral factors are currently restricting the wide-scale use of magnesium in more vehicle applications such as cost, formability, ductility, flammability perception, galvanic corrosion, joining, design constraints and creep or elevated temperature properties. Industry and government research initiatives are working to overcome magnesium’s deficiencies. Utilization of magnesium's ability for die casting complex parts will expand to further reduce part counts and vehicle weights. In fact, the 2017 American Foundry Society (AFS) Casting of the Year was a magnesium die cast automotive part for the Chrysler Pacifica.

OEMs and their tier one suppliers continue to research and Figure 6 - The lightweighting technology pathway roadmap shows magnesium and carbon fiber as the long term material choices. Source: Center for Automotive ResearchFigure 6 - The lightweighting technology pathway roadmap shows magnesium and carbon fiber as the long term material choices. Source: Center for Automotive Researchdevelop magnesium alloys and processes for automotive component applications. According to a Frost & Sullivan “Lightweight Options and Forecast of Material Types” presentation, several global mass market OEMs have made recent advancements in mass-produced magnesium processing, joining and manufacturing technologies. Most automotive experts see magnesium as a longer-term solution to light-weighting vehicles due to the higher cost of magnesium (see figures 6 & 7).

The Vehicle Technologies Office (VTO) is supporting a variety of research with INFINIUM (a metal production and recycling company), Pacific Northwest National Laboratory (PNNL), the Automotive Materials Partnership (USAMP) and Oak Ridge National Laboratory (ORNL) to overcome the barriers restricting magnesium use in automotive applications. The VTO’s Long-Term Lightweight Materials Research (Magnesium and Carbon Fiber) has resulted in a number of improvements such as new magnesium alloys, material test procedures, improved manufacturing processes, corrosion preventioFigure 7 - Automotive materials choices based on weight savings and cost impact, 2016. Source: Frost & SullivanFigure 7 - Automotive materials choices based on weight savings and cost impact, 2016. Source: Frost & Sullivann techniques and better-joining methods. For example, a new manufacturing process was developed to enable warm forming of magnesium sheet for high volume applications. The feasibility of friction stir-welding magnesium-steel joints was demonstrated, which is an important type of joint for integrating magnesium components into vehicles more widely. Demonstration structures were created that would allow manufacturers to develop a vehicle front end with a large amount of magnesium. New test methods have been established to better simulate how magnesium structures will react to conditions with vehicles.

Magnesium, aluminum, composites (CFRP or GFRP) and other lightweight materials could reduce the weight of some car parts by 30 to 75 percent. While current vehicles utilize only 0.3 percent magnesium on average, a McKinsey study (“Lightweight, Heavy Impact”) indicated that the magnesium content in cars will increase to 5 percent by 2030. Magnesium usage in automobiles is poised to increase as improved magnesium alloys are developed along with enhanced fabrication, joining and corrosion protection technologies. New automotive design methodologies need to be established for magnesium component development and the integration of magnesium parts in the multi-material vehicles of the future. New technologies for extracting or reducing low-cost magnesium ores to metals like Mag One's business model could truly disrupt and revolutionize the magnesium production resulting in new automotive magnesium applications. If low-cost magnesium becomes a reality in the near term, new automotive designs will likely contain a much higher percentage of magnesium sooner than expected.

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