I love South Africa and as an Australian citizen I love this...

I love South Africa and as an Australian citizen I love this country. But I still have a concerns with both axo and pma and australian vanadium in general. Vanadium is one of my favorite metals and its good to see really strong demand.

It's hard for me to understand how either Balla Balla or Windimurra can compete with South African producers. In South Africa we have higher kiln feed grades - around 2% v2o5, low silica and excellent process recoveries. From memory the magnetic recoveries in South Africa are more than 90%.

I suppose AXO is plausible, even if the concentrate grades are a bit lower by comparison to south africa; its process recoveries look reasonable and if we believe statements about clean burning natural gas, then maybe there is a bit of a purity advantage. In south africa, coal is used which is probably a heap cheaper than gas to fire kilns with.

South Africans use soda ash and sodium sulphate in the kiln the latter is recovered on site almost free of cost as a by product of the vanadium process. This has been used successfully for the last 40 years. The soda ash used to be quite cheap in SAfr, it seems to be more costly now. The idea of using oxalate seems quite reasonable at first, given it is a waste product in australia.

However, the poor location of some of these remotely located projects means considerable transport costs.
From some of the old propoganda, the PMA project used about 500,000 tonnes of oxalate flux a year. That's a hell of a lot of material to collect and transport nearly 600km (this part is not free). It's a lot of flux to be throwing into the kiln - mostly because of the high silica content. I think this would equate to roughly 5% or 6% flux additon.

To be competitive, a vanadium project needs to be able to land chemicals on site cheaply, which requires either a rail and/or a port to be nearby. The South Africans have rail, and the actual tonnes of soda ash flux required is reduced by re-using sodium sulphate. The sulphate does generate some gas emissions, but these can be dealt with by a scrubber.

To shake out the potential contenders (and I use the word "potential" with caution) requires a few more truths to be emphasised.

1. Coal is cheaper than gas
2. Grade is king, recovery is king
3. Higher Silica requires larger amounts of chemicals to be used ($$$$$)
4. Operations that have other products (such as steel) are more able to survive downturns in the vanadium price.


It is sickening that so much taxpayer money was invested towards the PMA project. The Standing Committee witch hunt and PMA were almost savage in their criticism of Xstrata. Yet PMA were the ones who lobbied for the state's investment in the first place and sold it to Xstrata. Xstrata then made a commercial decision to close the mine and copped the flak for it. Xstrata tried hard to make it work, and the efforts of their operations manager should be applauded. He was the their project champion and appears to have tried everthing in his power to keep it running.

Companies like Xstrata, Billiton, Rio Tinto, are the fabric holding the Australian mining scene together. They employ thousands, pay huge royalties and actively engage junior companies in joint ventures. I doubt that little players like AXO or PMA would or will be able to get up and run unless these giants allow them to.

Now PMA have plainted Billiton; how many enemies do these guys want to make?