Helium is the only element not discovered on earth, but in the spectrum of the sun’s radiation. On earth helium is formed through the radioactive breakdown of uranium and thorium. It typically occurs with natural gas at up to 1% concentration, but it can also occur with other elements such as nitrogen. World production in 2020 was about 140 million cubic metres of helium gas. The main producer by far was the US, accounting for around half total production.

The largest use of helium is as a liquid to cool the superconducting magnets of medical MRI scanners and NMR spectrometers. Over time helium is lost to atmosphere and must be regularly replaced. However recycling is possible and becoming more common. It is also used for leak detection, to protect growing silicon crystals, in disk drives in data centres and of course in balloons.

US helium reserves and resources are estimated to be 20.6 billion cubic metres, and for the rest of the world 31.3 billion cubic metres. Helium is one of the least renewable elements and while common in the solar system it is quite rare on earth as it can escape the hold of gravity.

There was a shortage from 2017 to 2020 but supply and demand are now balanced. However, prices have remained high, for example USD3800 per 100 litre dewar (a double-walled flask of metal or silvered glass with a vacuum between the walls, used to hold liquids at well below ambient temperature) of liquid helium, double the price before the shortage.

Nonetheless many commentators are expecting shortages to re-emerge as consumption keeps growing. Consequently, it could be a sector worth keeping an eye on. However, ASX exposure is very limited. There are only two companies with helium exposure as listed below. Avanti Energy Inc (TSXV:AVN) offers good exposure as does Helium One Global Ltd (LME:HE1).

CompanyASX CodeShare Price (c)Shares on Issue (M)Market Cap (M)Project
Blue Star Helium LtdBNL3.51,23343Various, US
Renergen LtdRLT2181738South Africa

03 May 2021 Uncategorized