Largo Resources said its vanadium pentoxide production grew by 11pc on the year to 3,340t in the fourth quarter of 2020, despite a 7.6pc fall in average spot prices in Europe, and expects output to increase in 2021.
It expects to raise its 2021 production to 12,000-12,500t of pentoxide-equivalent material, after factoring in a planned shutdown at its Maracas Menchen mine this month.
“In the first weeks of 2021, vanadium prices have increased in all main markets on the back of solid demand, low inventories and renewed optimism in the overall metals and industrial complex. We also believe that growing interest from the battery sector will continue to drive future vanadium demand growth in 2021 and beyond,” Largo chief executive Paulo Misk said.
During the shutdown this month, Largo plans to boost nameplate production capacity to 1,100 t/month, which means the company will have to produce at rates of about 99pc of capacity for the remaining 11 months of this year to hit the lower end of guidance.
Expectations of higher output come after the Toronto-based company reached a new annual production record last year, with output rising by 12pc on the year to 11,825t, which narrowly beat its full-year 2020 expectation of 11,750-12,250t.
In the fourth quarter of last year, total ore mined rose by 2.6pc to 338,226t from the same quarter a year earlier, but full-year totals fell by 5.9pc, to 1.09mn t, from 2019. At the same time, average vanadium prices in Europe fell year-on-year. Argus-assessed prices for 98pc vanadium pentoxide fused flake last year averaged $5.52/lb duty unpaid Rotterdam, a steep drop from an average of $9.58/lb in 2019.
Ore grades also fell, from 1.34pc to 1.29pc, over the full year of 2020, which is an operational challenge for the mine to address in the near and long term. Crushing recoveries rose by 1.1 percentage points to 98.1pc for both quarterly and annual rates, which points to improved efficiencies at the mill and sustainable rises in pentoxide production given constant ore grades.
The calculable global recovery rate metric, which summarises all stages of recovery, rose by up to 3 percentage points. It indicates Largo has recovered 81.4pc of the material and reflects the completion of continuous improvement projects at plant.
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