Strategically located in southern California, 5E Advanced Materials is poised to become a key player in the US boron supply chain.
Headquartered in mining-friendly San Bernadino County, California, 5E Advanced Materials is the newest player in the boron space. The location of the mine is in Fort Cady, California, located halfway between Los Angeles and Las Vegas. It is near interstate 40 and the BNSF railroad allows for shipping product to customers at a lower cost. 5E is currently producing boric acid at a steady run rate of one short ton per day for customer qualification, and is making sales to offset production costs.
The facility has been designated as critical infrastructure by the Cyber Security & Infrastructure Security Agency (CISA), which operates under the Department of Homeland Security (DHS).
Boron applications
Permanent magnets
A neodymium or permanent magnet is an alloy of neodymium, iron, and boron. Permanent magnets can create and maintain their magnetic fields without the use of external power, making them ideal for wind energy. In electric vehicles (EVs), they power the motors that turn the wheels. Permanent magnets are also found in computers, hard drives, headphones, and speakers, as well as in drills and other hand tools.
Aerospace and defence
Boron is widely used in the aerospace industry. Boron’s ability to withstand extreme temperatures without melting or becoming brittle, coupled with the fact it is an excellent conductor of electricity, make it well suited for such advanced use cases.
Boron nitride, an advanced derivative, is being tested out as a shield for extreme heat and radiation exposure during space travel. The material has a melting point of 2,973°C or 5,383°F, making it ideal for reusable spaceships exposed to extreme conditions from travelling through Earth’s atmosphere.
Boron fibres are used to repair aircraft, adding strength to bolster structural integrity to repairs on the outside of an aircraft. There is also tape with boron as an additive that can be used for bonding, insulation, and outside labelling on an aircraft.
Boron is used in fuel due to its energy density. According to the US Central Intelligence Agency (CIA), “The high-energy yield render boron substances extremely useful in the development of fuels for aircraft, missiles, and other specialised weapons.” In the same paper, the CIA goes on to say: “The boron powder in fuels is translated directly into greater thrust and increased range.” Boron’s ability to enhance fuel efficiency and bolster the structural integrity of aircraft translates into increased demand from both the commercial and defence sectors.
In addition to the above use cases, boron and carbon form boron carbide (B4C), also known as Kevlar. B4C is used in most forms of armour, from bulletproof vests to long-range rockets, military planes and vehicles.
Nuclear energy
Boron’s neutron-absorbing properties make it indispensable in the operation of nuclear reactors. Used in control rods, boron helps regulate nuclear fission reactions, ensuring safe and efficient energy generation.
Consumer electronics
The electronics industry relies on boron compounds for manufacturing. Borosilicate glass is used in lab equipment and is produced as Pyrex® from Corning and Duran® by Schott. Borosilicate glass is also used in home insulation as fibreglass. Additional large-scale uses include watches, smartphones, computers, TVs and other large screen displays.
Automotive
Ferroboron steel is an iron-boron alloy commonly used in automotive steel. Boron’s hardness property increases the strength, making cars safer and lighter, increasing fuel efficiency.
Agriculture
Boron is an essential micronutrient in agriculture. Boron supports the growth and development of crops essential for food security. Roughly 12% of the Earth’s land is used for farming, making repeated uses of fertilisers needed to maintain the micronutrient levels to produce the world’s food.
Investing in boron
The global boron market is an oligopoly dominated by two players. Rio Tinto (25%) and Eti Maden (60%) combine for 85% of the global borates market, leaving no real public investment opportunity in this growing space. Eti Maden is a Turkish-owned company.
In 2023, Rio Tinto’s revenue from the borates sector was less than 2% of total revenue, giving investors no exposure to this key mineral. This is where 5E Advanced Materials is uniquely positioned to provide exposure to borates.
5E Advanced Materials (5E) is the only ‘pure play’ investment opportunity in the boron space. 5E is listed on the NASDAQ as FEAM and the ASX as 5EA. As mentioned, 5E is already producing boric acid at the SSF located in the Mojave Desert in Southern California. 5E is also in the middle stages of engineering a large-scale commercial facility, capable of producing 90ktpa of boric acid as well as potential byproducts.
Recent events
5E recently received a letter of intent (LOI) from the US Export-Import Bank (EXIM) for $285m of debt financing needed for the project finance for the commercial (90ktpa) facility. The company recently hired Mark Zamek as VP Commercial Products. Mark brings over 20 years of experience of sales and marketing of borates at both Rio Tinto and Eti Maden.
A key strategic player
5E Advanced Materials stands out as a strategic player in the US boron industry, particularly as the US seeks to secure domestic supply chains for critical materials. Positioned to compete with industry giants like Rio Tinto and Eti Maden, 5E offers a unique investment opportunity as the only ‘pure play’ boron company. With its Fort Cady project already producing and plans for significant expansion, the company is poised to meet growing demand across industries ranging from aerospace to agriculture. As the global need for boron continues to rise, 5E is well-placed to play a key role in reshoring and strengthening the US boron supply chain.
Please note, this article will also appear in the 20th edition of our quarterly publication.
