What Is Vanadium?
Vanadium demand is not expected to fall anytime soon as the steel industry strengthens and the vanadium redox flow battery sector expands, with many ASX-listed mineral exploration stocks turning their attention to the commodity in recent years in the hopes of capturing a piece of this firming market.
Vanadium is one of the few industrial metals thought to be appealing.
Vanadium's name stems from its exotic past, since it may be found naturally in a wide range of brilliant colors as separate compounds. It was named after Vanadis, the Swedish Goddess of Beauty and Fertility.
Where does vanadium play a role?
Currently, 91 percent of vanadium produced is utilized in steel alloys, although it has a wide range of other uses. It is widely utilized in nuclear reactors, for example.
The adaptable substance is also used as a ceramic pigment and in a variety of medications.
Vanadium may be used to treat illnesses ranging from diabetes to high cholesterol. The use of this material in batteries, on the other hand, is what makes it so desirable right now.
Vanadium is a rare transition metal in nature, which may explain why it took a few years to be identified.
Vanadium would go on to gain international acclaim after being used to reduce weight and increase strength in the steel alloy chassis of the first mass-produced Ford Model T, as well as in other racing vehicles. Today, vanadium is largely used as an alloying agent, with 85 percent of production used to make items such as axles, bicycle frames, crankshafts, gears, and a wide range of high speed tool steels.
However, the use of vanadium in vanadium flow batteries has recently caught the attention of investors, sending the metal's price up by more than 130 percent in the previous year - a price rise bigger than that of other "hot" battery metals such as cobalt, lithium, and nickel.
The price has risen due to a lack of supply and strong orders from the steel industry, as well as many experts' belief that vanadium flow batteries, due to their longer life and greater stability, will eventually replace lithium batteries for large-scale applications such as grid stabilization battery plants.
Vanadium has the potential to be used in a variety of batteries, including lithium vanadium oxide as a prospective high energy density anode for lithium-ion batteries and vanadium phosphates as a cathode in lithium vanadium phosphate batteries, another form of lithium-ion battery.
Vanadium is used to strengthen steel in 91% of situations, although it is also utilized in chemicals and aerospace applications. However, it is the potential for grid energy storage in vanadium that makes it intriguing. Only around 1% of vanadium is now used to make batteries, but this might change if vanadium-based battery storage becomes more widespread. Vanadium might be beneficial in the cathodes of electric vehicle batteries. Vanadium miners would surely gain from new sources of demand.
Vanadium battery opportunity
As renewables have risen in popularity, so have investments in battery-based energy storage. The most prevalent are lithium-ion batteries, which are used in electric cars and smartphones, but vanadium-based batteries might potentially be utilized to store power on a large scale.
Vanadium flow batteries outlast lithium-ion batteries in terms of longevity, safety, and robustness. Vanadium batteries do not decay and do not catch fire during the charge and recharge cycle for at least 20 years. This qualifies them for utility-scale storage, although their sensitivity to fluctuating vanadium prices remains a concern.
Vanadium flow batteries are already available from firms such as Invinity Energy Systems in the United Kingdom. Despite the fact that high metal prices favor miners but not battery makers, vanadium producers such as Largo Resources and Bushveld Minerals are pushing into vanadium battery production.
New Uses For Vanadium
Vanadium has long been used in implanted defibrillator battery cathodes, but recent research is finding new potential for the mineral in renewable energy.
The metal has the potential to be used in electric vehicle battery cathodes as well as to help make windows smarter. The metal's specific properties, in particular, may retain heat in the winter and prevent heat in the summer.
This mystical substance, on the other hand, has a place in power.
VRFBs (Vanadium Redox Flow Batteries) are non-flammable, reusable, and easily scalable batteries. They deliver continuous power and have a life expectancy of 20 years or more. The batteries are appropriate for a broad variety of sustainable energy applications, including solar, microgrid, wind, and microgrid, due to this combination of qualities.
"The beauty of the vanadium redox battery is that you can charge and discharge it simultaneously, which a lithium battery cannot do," says Ivanhoe Mines founder Robert Friedland.
"You can put solar and wind power into the battery during the day, and excess grid electricity into the battery at night, and you can have a dependable output into the grid at the same time with a vanadium redox flow battery."
Vanadium was once known as Cornerstone Metals. In 2018, its name was changed.
The Carlin Vanadium Project in Nevada is the focus of First Vanadium's operations. According to a recent investor report, the mine has the "largest best grade primary Vanadium deposit" in North America, and First Vanadium owns the property. The vanadium grade is significant, but the mine's location is critical.
The vast bulk of vanadium comes from China. Aside from tariff worries, which have escalated the price of the material, China has also had substantial environmental challenges, which have led to the closure of numerous mines. First Vanadium's Carlin mine is the only source of vanadium in the United States. This implies that there will be no tariffs to deal with and that transportation will be straightforward.
Vanadium prices have risen by 60% in the previous year to more than $11/lb, thanks to a growing global economy. Sanctions on Russia, the world's second-largest supplier of vanadium behind China, might drive up prices even more. At the same time, there isn't a lot of new supplies. Largo's Maracas Menchen vanadium mine in Brazil is the first to begin active in almost 30 years.
Of course, past achievement is no guarantee of future success. The vanadium market is small, and prices have been volatile. They soared in 2018, when China halted production for environmental reasons, then fell precipitously.
Global Vanadium Producers
The vanadium redox flow battery is a rechargeable battery that uses vanadium ions to store chemical potential energy. The vanadium redox battery, unlike other types of batteries, has a virtually infinite energy capacity.
The world's top vanadium producing countries are listed below.
Brazil
The country's total vanadium output was 8,400 megatons in 2017, before plummeting to 5,500 megatons in 2018. Its vanadium ore output increased modestly to 7,000 megatons in 2019.
Largo Resources, the country's only pure-play vanadium producer, is principally responsible for the country's vanadium production. The company's Maracas Menchen vanadium project is the highest-grade vanadium mine in the world.
South Africa
Vanadium output in South Africa has grown in recent years. Its output peaked at 13,000 megatons in 2017, then dropped to 7,700 megatons in 2018, before rising slightly to 8,000 megatons in 2019. The bulk of the country's contribution to the vanadium market is accounted for by Glencore and Bushveld Minerals. The latter's vanadium mining business consists of three assets in South Africa's Bushveld Complex.
Russia
The total vanadium output in Russia in 2019 was 18,000 megatons, the same as in 2018. The nation possesses the world's second largest vanadium reserves, with 5,000 megatons. Evraz Lgok is Russia's biggest mining company, and it produces the metal.
China
With a production of 40,000 megatons in 2019, China was the top producer of vanadium in 2019. The country's output exceeds that of all other vanadium-producing countries combined. China is also the world's largest vanadium consumer. Despite the fact that its steel output has been declining in recent years.
Aside from the top four producers, companies such as Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) are establishing themselves as major vanadium producers in the United States.
Vanadium batteries should also be considered. They offer various benefits, but they are also very big in contrast to other battery choices.
Compared to electric vehicles, their size makes them more appropriate for stationary applications such as industrial.
That is not to say that vanadium will not play a role in future energy markets. The material has simply too many advantages to ignore, and the stationary energy market is growing.
It is expected to more than double between 2017 and 2026. Vanadium may experience a large boost as the industry grows.
1. Energy Fuels (UUUU)
Although Energy Fuels is mainly a uranium miner, it is also the United States' only vanadium producer. Vanadium is found near uranium, and the UUUU contains mines for both uranium and vanadium, including the La Sal Complex, Whirlwind Mine, and Rim Mine.
Energy Fuels also owns the White Mesa Mill, the United States' sole conventional vanadium mill. In 2018 and 2019, the company increased its vanadium production capacity, driving it to the number one vanadium producer in the United States in 2019.
Although UUUU is not only focused on vanadium, its main business, uranium, can fuel carbon-free nuclear energy. (Of course, there are many who oppose nuclear power.) In addition, Energy Fuels is expanding into the rare earths industry. Rare earth minerals are minerals used in electric cars, batteries, and other forms of technology.
Despite the fact that Energy Fuels does not expect to produce any vanadium in 2021, the company does have around 1.7 million pounds of high-purity vanadium on hand. They also have a large stockpile of vanadium resources in their backup mines.
2. Western Uranium & Vanadium
Western Uranium & Vanadium (CSE:WUC) has prioritized low-cost, near-term uranium and vanadium production. The company has uranium and vanadium deposits in Western Colorado and Eastern Utah, which it acquired from Energy Fuels in 2014, as well as additional uranium possibilities obtained via the acquisition of Black Range Minerals. With the purchase of Black Range, the business added ablation technology to its portfolio.
In June, Western Uranium & Vanadium completed a strategic acquisition of natural uranium concentrate. The deal is now complete, and the corporation paid US$32 per pound for 125,000 pounds of material, according to the most recent announcement; the current market price is more than US$40. The business announced plans to restart operations at its Sunday mining complex throughout the summer, and a mid-November report suggested that significant progress is being made. The company's shares touched a 2021 high of C$3.97 on September 15.
3. Largo Resources (LGO)
Largo Resources is a pure-play vanadium producer established in Canada with a vanadium mine in Bahia, Brazil. The Maracas Menchen mine produced 10,319 tons of vanadium in 2021, and Largo expects production to increase to 12,000-12,750 tons in 2022.
Largo is also aiming to commercialize vanadium redox flow batteries (VRFBs). They believe that VRFBs can outperform lithium-ion batteries over long periods of time.
Largo's VCHARGE batteries, which have been under development for around ten years, include electrolytes that do not degrade throughout the lifetime of the battery's 25-year life. VionX Energy, which Largo purchased, created the batteries. The first batteries are expected to be delivered to Enel in the third quarter of 2022, according to Largo.
4. Bushveld Minerals (BSHVF)
Bushveld Minerals is a South African vanadium producer with two mines. Bushveld has two vanadium processing units and is one of the world's top three vanadium producers. The company produced 3,529 tonnes of vanadium in 2021, but they want to expand production to 5,000-5,400 tonnes by the end of 2022.
Through its subsidiary Bushveld Energy, the company is developing VRFB technology for the energy storage market. (The energy storage market is predicted to reach $50 billion by 2027, albeit this encompasses numerous types of storage.) Vanadium battery storage might be particularly useful in areas without a stable power infrastructure, such as South Africa. Durable batteries in combination with solar panels might be a realistic option.
Bushveld Minerals is a publicly listed firm on the London Stock Exchange.
5. Western Uranium & Vanadium
Western Uranium & Vanadium (CSE:WUC) has prioritized low-cost, near-term uranium and vanadium production. The company has uranium and vanadium deposits in Western Colorado and Eastern Utah, which it acquired from Energy Fuels in 2014, as well as additional uranium possibilities obtained via the acquisition of Black Range Minerals. With the purchase of Black Range, the business added ablation technology to its portfolio.
In June, Western Uranium & Vanadium completed a strategic acquisition of natural uranium concentrate. The deal is now complete, and the corporation paid US$32 per pound for 125,000 pounds of material, according to the most recent announcement; the current market price is more than US$40. The business announced plans to restart operations at its Sunday mining complex throughout the summer, and a mid-November report suggested that significant progress is being made. The company's shares touched a 2021 high of C$3.97 on September 15.
6. Australian Vanadium (ASX: AVL)
Australian Vanadium, previously known as Yellow Rock Resources, is now concentrating its efforts in Western Australia on the development of its Gabanintha deposit.
Gabanintha's most current mineral resource estimate is 179.6 Mt at 0.75 percent vanadium pentoxide (V2O5), which comprises a 10.2 Mt Measured Mineral Resource at 1.06 percent V2O5, a 25.4 Mt Indicated Mineral Resource at 0.62 percent V2O5, and a 144 Mt Inferred Mineral Resource at 0.75 percent V2O5.
VSun Energy, an Australian Vanadium subsidiary, promotes vanadium flow batteries for a number of applications, including grid storage for renewable energy sources such as wind and solar, as well as backup power.
The key advantages of vanadium flow batteries, according to VSun, are that they are scalable, have a 20-year lifespan, release energy instantly, have a charge retention of up to a year, and can be entirely drained with no injury or loss.
The batteries are essentially safe, according to VSun, since they are non-flammable and non-explosive, and they can be cycled many thousands of times with significantly less capacity loss than alternatives.
7. Syrah Resources (ASX: SYR)
Despite the fact that the project is best known for its flagship and recently commissioned Balama graphite mine in Mozambique, few people are aware of its vanadium prospectivity.
Syrah Resources' primary project in Mozambique was known as the Balama graphite and vanadium project until 2015.
In mid-2014, Syrah conducted a scoping study on generating vanadium with graphite at Balama. Metallurgical testing throughout the inquiry provided 99.9% pure vanadium pentoxide.
At the time, the project's reserve was 1.15 billion tonnes of 10.2 percent total graphitic carbon and 0.23 percent vanadium.
According to Syrah, the Balama vanadium resource is four times larger than the world's largest operating vanadium deposit in South Africa.
According to the scoping study, following a $80 million capital expenditure and an annual EBITDA of $85 million, up to 255,000tpa of V2O5 may be produced for 20 years.
In mid-2015, Syrah revealed in its final feasibility assessment for Balama that the vanadium resource will be subjected to a comprehensive feasibility study once the graphite section of the project was commissioned.
Tailings will be maintained of the vanadium-bearing concentrate from the Balama graphite mine.
Conclusion
Although vanadium is today mostly used to strengthen steel, it may hold promise in the transition to sustainable energy. According to the Clean Energy Institute, vanadium flow batteries are a viable technology for large-scale energy storage. Is there a better metals sector for investors than vanadium, with its ostensibly enormous expected demand and underlying supply issues? You may invest in vanadium using the list above.
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