Vanadium price recently surged to over US$12/lb, having increased from US$6/lb at the start of 2021 and indicating a move to the high demand, low supply pricing distribution.
Vanadium may be a lesser-known metal, but its applications are just as important to the manufacturing industry as its more favoured counterparts.
This medium-hard metal is malleable, ductile, and corrosion-resistant and its end-use in steel dominates the elemental metal’s demand globally.
Vanadium-steel alloys are required for extremely tough tools such as axles, armour plates, car gears, springs, cutting tools, piston rods and crankshafts.
In an age where the discussion surrounding nuclear energy is gaining momentum, it is also worth noting Vanadium alloys may be used to make nuclear reactors due to their low-neutron-absorbing properties.
Mixed with aluminium and titanium, vanadium can create a strong alloy used for special applications such as dental implants and jet engines.
In fact, as a speciality alloy, vanadium’s use in the defence and aerospace sector contributes to its critical mineral status.
Further to this, vanadium electrolyte for redox flow batteries (VRFB) is gaining momentum, driven by the global push for renewable energy storage technologies and the transition to net zero emissions. More on that shortly.
Suffice to say, vanadium’s range of use stretches far and wide.
Vanadium as a critical metal
Vanadium is an irreplaceable component due to its high strength characteristics.
High-performance steel alloys for use in aerospace application depends on vanadium and it is also considered a critical metal in the high-speed transport sector.
Lately, it has been gaining attention as one of the critical metals for the rising energy storage market.
Vanadium pentoxide is the main ingredient in vanadium redox flow batteries used for grid energy storage.
“This is a market that should, by all reasonable practical means, grow over the next five to 15, maybe 20 years, as we get more and more into decentralised electrical generation. And the vanadium redox flow battery will definitely fit into that category,” John Priestner, President and CEO of Vanadium One Energy Corp (TSX.V:VONE, Frankfurt:9VR1) told Aheadoftheherd.com.
Growing demand for energy storage
VRFBs are suited to stationary energy storage applications, are non-flammable compared with lithium batteries and have a longer service life (around 20 years).
Lithium batteries can last for about 10 years.
VRFBs can also discharge 100% of their stored energy.
The one downside, although it isn’t much of an issue, is VRFBs are heavier per unit, making them more suitable for stationary storage applications.
Globally during the past year, there have been about 1.26 GWh (gigawatt hours) of VRFBs either installed or announced.
This is equivalent to a requirement of over 12,000 tonnes of V2O5.
Recent trends show that vanadium consumption directly attributed to the use in energy storage is expected to grow significantly.
Vanadium price recently surged to over US$12/lb, having increased from US$6/lb at the start of 2021 and indicating a move to the high demand, low supply pricing distribution.
Increased global geopolitical volatility amidst the Russia-Ukraine crisis and Chinese regulatory changes specifying the increased use of micro alloyed steel are impacting the price and this trend looks to continue into 2022 and beyond.
The growing use of vanadium in energy storage is also likely to impact long term pricing with a premium being received for limited volumes of high purity (99.6% V2O5) needed for use in batteries.
Surge in vanadium demand and price
Vanadium prices are up by 60% since the beginning of 2022 with the Chinese infrastructure sector continuing to drive demand.
The global vanadium market is expected to grow by 28,310 tonnes from a base of 73,000 tonnes during 2020-2024, according to UK-based Technavio Research.
But this doesn’t consider the recent restrictions on Russian supply that accounts for about 25% of existing global supply and an upswing in defence and space spending globally.
It is worth noting that China is a net importer of vanadium and the US imports almost 100% of its vanadium.
With the China-Russian trade alliance taking up Russia’s production, the world is expected to be in vanadium deficit.
New vanadium projects in the Mid-West of Western Australia
One company that is looking to capitalise on the turn toward vanadium is Surefire Resources NL (ASX:SRN).
Surefire has two vanadium projects 560 kilometres northwest of Perth, Western Australia containing an inferred resource of over 2 billion pounds of V2O5 (vanadium pentoxide).
The Victory Bore Project and the Unaly Hill Project form a contiguous tenement holding with the Victory Bore licence E57/1036 abutting the Unaly Hill licence area E576/1068 on its northern boundary.
Surefire’s initial studies indicate the economic viability of the project to produce a high-grade V2O5 product.
During metallurgical testing, the company achieved first stage concentration of 1.43% V2O5 with 93.7% recovery of vanadium, not sensitive to primary ore grade.
The second phase metallurgical testing is being planned to refine the process flow parameters.
Surefire is also planning a further drill out program to establish an indicated resource to set the project up for a prefeasibility study.
The timing of its work program is significant here.
We mentioned earlier the that approximately 1.26 GWh (gigawatt hours) of VRFBs have been installed or announced over the past 12 months and that this was the equivalent to a requirement of over 12,000 tonnes of V2O5.
Putting this into perspective using Surefire: the company’s planned annual production is 7,600 tonnes of V2O5.
That is a significant number compare with the requirement.
Note the mine life of over 40 years. Cost estimates indicate the project is viable at today’s Vanadium prices.
As the company recently stated: Surefire is greatly encouraged by the increased global commodity price of vanadium and considers that the company is now well positioned to further develop and monetise the Project.
There are several highlights:
Initial studies indicate the economic viability of the Project to produce a high-grade vanadium pentoxide product.
Critical areas to deliver an efficient and economic processing outcome have been identified.
Second phase metallurgical testing to be undertaken to refine the process flow parameters.
Confidence to proceed to a further drill out programme to establish an Indicated Resource.
Completion of these activities will set the project up for a prefeasibility study.
One other thing of note is the Australian government’s support for these types of projects.
Australia moving in the right direction
Last year, the Federal government announced its 2022 critical minerals strategy that would expand downstream processing and help meet future global demand.
Its vision is to put Australia at the centre of meeting the growing demand for critical minerals that underpin Australia’s prosperity and security by improving access to reliable, secure and resilient supplies of critical minerals.
According to Minister for Resources the Hon. Keith Pitt MP, “The need for robust supply chains has been highlighted by the COVID-19 pandemic. Countries are increasingly seeking access to reliable, secure and resilient supplies of the critical minerals they need. Australia’s large critical minerals reserves, technical expertise and track record as a reliable and responsible supplier mean the sector can respond to market demand.
“This strategy sets out a long-term plan to leverage growing global demand and develop a thriving and durable Australian critical minerals sector – one that contributes to the national security and economic prosperity of Australia and the Indo-Pacific region.
The Australian Government is taking action to grow Australia into a critical minerals powerhouse, capitalising on the strength of our world-leading resources sector, expertise in processing and highly skilled workforce. We have committed $200 million to the Critical Minerals Accelerator Initiative to support strategically significant projects at challenging points in their development. This funding will accelerate projects to market and drive investment. A $50 million virtual Critical Minerals Research and Development Centre is also being established, leveraging the expertise of Geoscience Australia, CSIRO and the Australian Nuclear Science and Technology Organisation to drive breakthrough collaborative research with industry.”
Vanadium is well and truly in this mix and Surefire is working towards making itself a critical go-to player.
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