Open File Report 1993-19

Open File Report 1993-19

OFR 1993-19

Economic Analysis of Extracting Calcium Chloride and Magnesium Chloride from Alberta Brines

Author(s) Donald B. Cross & Associates Limited Date 1993-03-01

Both in Canada and the United States the production of calcium chloride and magnesium chloride is characterized by one dominant central producer and a number of smaller satellitic producers. The market for each product is mature and shows no signs of significant growth in the near term. Production capacity of all plants for both products is underutilized because of an oversupply of product in each market. Both the calcium chloride and magnesium chloride industries produce a wide variety of value-added products some of which are market ready and some of which serve as raw materials for further processing in allied industries.

The estimated fixed capital cost, in 1993 dollars, to construct a brine processing plant in Alberta to produce 28,406 tonnes per year of magnesium chloride and 46,480 tonnes per year of calcium chloride is $52.6 million. It is estimated that the average unit cost of production for a combined calcium chloride-magnesium chloride plant would be $299.69 per tonne. This results in an operating loss per tonne for calcium chloride of $65.19 and an operating profit per tonne for magnesium chloride of $112.35. A net annual operating profit of $160,000.00 before tax would be insufficient to retire the fixed capital cost investment of the plant over a 20 year life. This means that the investment is uneconomic.

Upgrading of brine feedstocks must be achieved either by employing solar evaporation or by discovering richer natural brines. Upgrading of brine feedstock through solar evaporation may contribute to the lowering of operating costs per tonne of production. Solar evaporation may also represent a lower initial capital cost alternative to the use of multiple effect evaporators. Additional research is required to evaluate these alternatives.

Through the servicing of local markets, where a product of comparable quality can be offered, a cost advantage may exist based upon lower transportation costs to the consumer. Further reductions in transportation cost could be achieved through the application of advanced technology to reduce the bulk of the product. On this basis opportunities for market penetration may exist on a regional basis.

Potential secondary economic benefits accruing from the development of the brine processing industry may include the production of magnesium metal from a mothballed magnesium smelter in Aldersyde, Alberta.