IperionX (NASDAQ: IPX) (ASX: IPX) shares are up 100% (well, OK, 99%) on NASDAQ as a result of a deal announced with Ford motors to make titanium parts for their high end vehicles. We do not say that this deal will work - we do say that it could. Our point here being that yes, this does accord with the basics of the metals business, it makes sense. IperionX has something that near no one else does have. That something is potentially most useful - but that's not, not quite, the same as stating that this will definitely produce a large stream of those lovely profits. It's to say that it's logically possible that such profits will arrive.
IperionX is really two different businesses glued together. They've that titanium prospect at the Titan Project. Well, yes, lovely and all that, but that's actually a really very standard mineral sands project. Titanium, rare earths and zircon. The only even vaguely interesting part here is that it's inside the US. Other than that there are many with those same minerals. The rare earths are unlikely to produce value unless there's a very large change in the regulation of thorium wastes within the US. This should happen anyway but it is a problem for anyone trying to extract rare earths from such an ore. The zircon and titanium precursor (maybe ilmenite, maybe rutile) from the same mineral sands are at best at a few hundred $ per tonne. They're also bulk materials, available from many sources.
In fact, the processed forms are available from many places - TiO2, titanium dioxide, can be bought from DuPont (perhaps the spin off, Chemours) by the thousands of tonnes and they'll not blink an eyelid, just ask for your EITN then send the trucks around. That is, the ownership of the mineral sands is the ownership of a simple bulk operation, one that sells into a very liquid market. And the titanium metals operations do not depend, or even benefit from, being connected to those mineral sands.
IperionX stock price from NASDAQ
The titanium metals operations are where the interest is. Turning oxide into metal here is the complicated and expensive part of the process. And if you want Ti metal to be able to make powder to then do 3D printing that's what you've got to do. Except - except if you're IperionX, who have a method of taking scrap Ti and turning it into powder which can then be used for 3D printing. That's the unique part of the set up. It avoids all the expense of having to make the metal in the first place - that's $10s per kg of metal often enough.
There are several people who can do 3D printing with metals. There are many who have access to those mineral sands deposits. Everyone who can do 3D printing can gain access to TiO2. But as we say, the different part here is IperonX's ability to use Ti scrap as the starting point.
That they've landed Ford as a potential customer is value additive. But the point we're making here is that, at least at present. IperionX has that little technological moat around what it is doing. And that's in that ability to use titanium metal scrap as the feed into the process.
