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Yellow Rock Resources eyes vanadium battery storage market

With an eye on the vanadium battery storage market and becoming a fully integrated vanadium company, YRR has secured distribution rights with two German vanadium battery makers. Vanadium batteries could account for up to 30% of the grid-scale energy storage industry that could be worth US$100 billion by 2020.
Yellow Rock Resources eyes vanadium battery storage market

Yellow Rock Resources (ASX:YRR) is moving up the value chain signalling an intention to claim a chunk of the growth in the vanadium battery market and becoming a vertically integrated vanadium company.

The grid-scale energy storage industry is tipped to grow to US$100 billion by 2020 with Vanadium Redox Flow Batteries (VRFB) expected to capture up to 30% of this market.

Yellow Rock’s Gabanintha Vanadium Project is Australia’s highest grade and best located vanadium-titanium-iron deposit at Gabanintha in Western Australia.

An upgrade is underway to the resource base at Gabanintha after recent drilling returned highest ever vanadium grades of up to 2.2% V2O5.

This will in turn pave the way to more definitive economic studies in 2016.

As part of this strategy, the company has created subsidiary company VSUN Pty Ltd to develop opportunities in the distribution of VRFBs.

It has also secured distribution rights with two German vanadium battery makers and is in negotiations with other major stakeholders in the vanadium battery storage market.

In Australia, the company has partnered with a Perth-based commercial solar installer which has an extensive track record of commercial and residential solar system installations.

These moves will allow Yellow Rock to leverage its Gabanintha project in Western Australia, Australia’s highest grade and best located Vanadium-Titanium-Iron deposit that is currently being advanced to feasibility.

Vincent Algar, chief executive officer, commented:

“As we develop this project we are seeing the rapid development of commercial grid storage technologies, such as the scalable Vanadium Redox Flow Battery.

“The VRFB is very well suited to the commercial and grid solutions being called for in this exciting space.

“Our step into the battery and vanadium electrolyte distribution market is designed to build a significant market share as an integrated company, benefiting shareholders with early cash flows.

“The amount of power being generated from renewable energy sources is growing as people recognise the value of a sustainable and predictable source of energy.

“Battery storage is integral to the continued development of this market in order to regulate and take full advantage of renewable energy creation.”


Vertical Integration


VSUN will focus on the development of VRFB market opportunities, initially within Australia.
    
It will primarily be concerned with the distribution of vanadium flow batteries from global producers, leveraging off installer partners and their existing client bases.

This includes the right to distribute German VRFB’s from two suppliers inside Australia as well as the partnership with the Perth-based solar installer.

VSUN will also evaluate how it can participate in the manufacture of vanadium electrolyte – the key element of the batteries – using vanadium sourced from its Gabanintha Project.

Development of Australian electrolyte plants will maximise value within the local markets.

VSUN will undertake market development activities to identify potential clients. It will also finalise detailed technical discussions with the battery suppliers and electrolyte plant developers.

Marketing information for the new company is being developed ahead of a full scale launch planned for October 2015.


Vanadium Redox Flow Battery Demand


It is expected that over the next few years, as demand for grid-scale energy storage grows, up to 30% of the storage demand will be satisfied by VRFBs  as part of over 185 gigawatt hour of expected storage.

As a result, this could result in demand for an additional 300,000 tonnes of vanadium, purely for use in batteries. This represents a three-fold increase in current vanadium consumption in the global steel industry.


Gabanintha Vanadium Project

Yellow Rock’s Gabanintha Vanadium Project is currently undergoing an update to the resource estimate after recent drilling that returned highest ever vanadium grades of up to 2.2% V2O5.

This will in turn pave the way to more definitive economic studies in 2016.

Gabanintha  currently has a high grade Indicated and Inferred Resource of 60.4 million tonnes at 0.98% vanadium, 11.4% TiO2 and 42.15% iron.


Analysis

Yellow Rock Resources move to become a vertically integrated vanadium company will allow to claim a chuck of the growing battery storage market, with the grid-storage sector alone estimated to be worth US$100 billion by 2020.

Its VSUN subsidiary will not only explore distribution of VRFB in Australia, it will also evaluate the potential to produce vanadium electrolyte – the key element of the batteries – using vanadium sourced from its Gabanintha Project.

A resource upgrade at Gabanintha and upcoming feasibility studies will assist the cause.

A focus on supplying its potential vanadium production to the battery storage market, which is growing fast alongside energy production from renewable sources is key to the strategy.

An additional 300,000 tonnes of vanadium, purely for use in batteries will be required so Gabanintha appears well positioned to participate and YRR's negotiations with electrolyte producers, battery manufacturers and Australian-based solar installers are first steps in the process.

A full scale launch is expected in October 2015.

 

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