The central theme to this week’s Technology and Low Emission Minerals Conference was how battery mineral markets, as well as uranium and other clean energy commodities, will be impacted by renewable energy targets and expanding climate change policy.
Speaking after lunch on the first day, CSA Global Pty Ltd principal consultant Tony Donaghy gave a presentation titled ‘Vanadium: Putting Renewable Energy to Work When You Need It’ which detailed the current vanadium market and its growing potential for use in battery storage.
Supported by presentations from vanadium players such as Australian Vanadium Ltd (ASX:AVL) and ScandiVanadium Ltd (ASX:SVD), the conference was reminded of vanadium’s huge growth potential as the principal element in vanadium redox flow batteries.
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Vanadium was the best performing battery mineral in the last 12 months, based on price increases, despite most of global supply going to steel production.
Donaghy said that vanadium consumption had substantial room to grow in Asian steel markets due to potential improvements in grade and purity.
New standards for Chinese rebar will require more vanadium and further steel production is expected to increase demand for automotive and aviation materials and high-strength steel structures.
He also noted that analysts had predicted a significant deficit in vanadium by 2027, based on current projects in the pipeline and expected demand trends.
The present vanadium supply is largely dominated by coke production in steel markets, with vanadium in batteries growing from 1% in 2015 to 2% in 2017.
In that same period, however, vanadium consumption from steel also increased from 68% to 76%.
Only 17% of present supply comes from primary vanadium sources, with the remainder produced as by-products.
Donaghy listed a number of current supply constraints including lower production in China; shutdowns such as South Africa Highveld Steel; and lower North American vanadium volumes.
CSA Global's Tony Donaghy
ScandiVanadium director Brandon Munro introduced the emerging vanadium junior’s shale-hosted project in Sweden and briefed the audience on the critical role vanadium redox flow batteries will play as renewables take greater shares in power grids.
He said: “Vanadium appeals to me in a very deep, purpose-driven way – I’ve done a lot of work with the World Nuclear Association, and that’s been primarily driven at understanding the forward demand trajectory for nuclear power.
“And you can’t understand nuclear power demand unless you understand renewable demand, and the role renewables can play.
“There’s a key piece missing, and that is that intermittent renewables, without a storage solution, are hugely destructive to the existing grid infrastructure that we have spent the last 100 years building.”
Munro said that without storage capacity to back-up intermittent renewables, he believed our societies would start to reject renewables because they would mess with grid infrastructure.
This leaves only two viable storage solutions for grid power – pumped hydro, which has a number of constraints, and the vanadium redox flow battery.
Source: Bushveld Minerals
Vanadium redox flow batteries have unique advantages including high lifecycles, no capacity loss over time, simple scalability, improved safety and immediate and rapid energy release.
The mineral itself is derived from vanadium-titanium-magnetite (VTM) deposits, shale-hosted deposits or as secondary products from fossil fuels and uranium.
China dominates vanadium production due to its steel industry and is also the price driver and primary market for the commodity, consuming 92% of globally produced vanadium.
Donaghy said that a substantial downscaling of fossil fuel reliance in vanadium production was projected by 2050, potentially focusing global production on magnetite and shale-hosted projects.
AVL managing director Vincent Algar, speaking on the second day, explained to the conference that vanadium supply was in a deficit due to increased demand from the battery sector and tightened environmental controls in China.
He said that current producers could increase their supply to provide up to half of the deficit and developing deposits with high in-situ grade, combined with high concentrate grade, would have the best chance of success.
AVL has completed a baseline pre-feasibility study for its Gabanintha Vanadium Project in WA, which estimates a net present value (NPV) range for the project that has an upper end of US$2.37 billion when assuming a US$20 per pound vanadium price.
The base case demonstrates robust project fundamentals featuring competitive product costs and financials and will allow AVL to move quickly into piloting and a definitive feasibility study.
Gabanintha has a vanadium resource of 175.5 million tonnes at 0.77% vanadium pentoxide, which includes a high-grade zone of 93.6 million tonnes at 1%.
ScandiVanadium will list on the ASX next week with an enterprise value of $4.5 million.
The IPO-stage junior completed its acquisition of Skåne Vanadium Project yesterday and aims to develop the project’s sedimentary-hosted ore body which formed on the seafloor and exists over tens of square kilometres.
Skåne’s vanadium-rich deposit is about 10 metres thick and runs from surface over more than 40 kilometres.
Munro said the project’s shale-hosted vanadium “potentially offers some very distinct metallurgical advantages over other forms of vanadium ore bodies, particularly for feeding the vanadium battery market”.
Outcropping formation at the Skåne Vanadium Project