The article below came into my inbox last night.
It highlights the impact of VRFB energy storage systems pointing to a potential shortage of vanadium in the very near future.
Let's hope this timing favour's SRN and their Saudi JV options.
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WRITTEN BY
Angela East - Mining News
Vanadium’s surging demand sparks global supply race
This article is a sponsored feature from Mining.com.au partner Velox Energy Materials. It is not financial advice. Talk to a registered financial expert before making investment decisions.
Aerospace, automotive and construction are still the major sources of rising demand for vanadium, but the ever increasing adoption of vanadium redox flow batteries (VRFB) is positioning the market for a substantial supply-demand imbalance.
Market watchers estimate the overall global vanadium market will climb at a compound annual growth rate (CAGR) of between 4.4% and 4.7% to be worth potentially as much as US$61.79 billion ($95.18 billion) by 2032.
Allied Analytics says the VRFB market alone is expected to witness a CAGR of 15.8% to reach US$523.7 million globally by 2030.
According to the Queensland Government, that could be even higher at closer to 21% annual growth through to 2029.
Simon Coyle, CEO of emerging vanadium producer Velox Energy Materials (TSX-V:VLX) (Velox), says various market studies and forecasts indicate that the long-duration energy storage market could see exponential growth, potentially reaching tens of gigawatts of installed capacity by 2030.
“Some estimates suggest a compound annual growth rate of 20-30% during this period,” he tells
Mining.com.au.
The United States Geological Survey estimates 2023 worldwide vanadium production totalled 100,000 tonnes.
The International Energy Agency forecasts an increase of 670,000 tonnes each year of vanadium supply is required by 2040 to meet growing demand.
“This equates to an additional 50+ mines producing 12,500 tonnes per annum of V2O5 (vanadium pentoxide),” Coyle says.
VRFBs are considered better for energy storage over lithium ion batteries due to their long life, high discharge capacity, and ability to decouple energy capacity which makes them scalable.
Around 70% of vanadium supply is derived as a byproduct of smelting vanadium-rich iron ores and in some cases is sourced from oil refining, mainly in China and Russia.
The Queensland Government says mining and processing of vanadium as a primary commodity represents about 18% of the market, while recycling is estimated to cover the remaining 12%.
Global supply is largely controlled by China, which accounts for over 66% of production and hosts nearly 40% of the world’s known reserves. China is also a major consumer of vanadium, particularly in its steel industry, accounting for 56%.
Australia’s vanadium reserves hold untapped potential
Meanwhile, Australia hosts nearly a quarter of the world’s reserves but does not currently produce any vanadium of its own. Queensland, in particular, has one of the world’s largest known resources for vanadium.
There are three sources of vanadium in the state – oil shale, vanadium titaniferous magnetite, and iron oxide-copper-gold-uranium-rare earth deposits.
Exploration in the Julia Creek-Richmond area was initially focused on hydrocarbons in oil shale, however the focus has shifted to vanadium exploration over the last couple of decades.
There are several projects that are currently advancing toward production of vanadium in Queensland, including Velox’s North Queensland Vanadium Project.
Velox is progressing its strategy to develop vanadium products that can be transformed into vanadium electrolyte – the key ingredient in VRFBs.
The 1,246km
2 North Queensland Vanadium Project sits about 500km southwest of Townsville in the emerging North West Minerals Province that is a major focus for the federal and state governments.
In September, work started on the second workforce site at the multi-billion-dollar CopperString Project, which is aimed at unlocking the $500 billion North West Minerals Province and one of the largest Renewable Energy Zones in the country.
This follows the start of construction in Hughenden in July on the first and largest workforce accommodation site along the 840km long transmission line corridor.
At the same time, the state government continues to roll out millions of dollars under its Collaborative Exploration Initiative aimed at uncovering new deposits across Queensland.
In June 2023, the government announced an additional $245 million in new funding commitments, including a $100 million Queensland Critical Minerals and Battery Technology Fund.
Of this, $75 million has been committed to the establishment of a common user facility in Townsville with the initial focus to be vanadium.
In the region, Richmond and Julia Creek are two key locations for vanadium deposits.
Coyle says funding for critical minerals from both the Australian and Queensland governments provides the platform for the vanadium industry to get off the ground in the Julia Creek/Richmond zone.
“It shows the support from a state and federal level that a vanadium hub within Julia Creek/Richmond is essential for the economy of Queensland as well as the economy of Australia as a whole,” he notes.
Renewables, critical minerals to power Queensland’s future
Coyle says the CopperString Project will benefit the entire region by providing renewable energy into the grid, which can then be utilised by critical minerals projects within the region.
He adds that it will assist in potentially lowering the overall energy costs of these projects and in turn reduce the overall costs of operations.
Velox’s North Queensland Vanadium Project has an existing resource of 206 million tonnes @ 0.33% vanadium, which sits within the company’s Cambridge Project area.
“This area is only a minor part of the entire tenement package, which in total is 1,246km2 all within favourable geology for vanadium exploration,” Coyle explains.
“So with a minor amount of further drilling there is a high potential for upside to the current size of the resource.”
The vanadium is hosted within shallow contiguous mineralisation, within the weathered zone of the Toolebuc formation, which Coyle says provides low-cost, low strip-mining project development in the future.
“Having a project with a low strip ratio, sediment-based mineralisation which provides low OPEX of mining and processing is key to Velox’s project development,” he says.
“Low cost operations will always outperform its peers.”
Cambridge mineralisation outcrops on the northern edge and dips shallowly to the south.
Vanadium mineralisation in the area has been documented to extend for several kilometres along strike, as evident in the Lilyvale deposit adjacent to Velox’s North Queensland Vanadium Project and Cambridge prospect.
Velox plans to develop vanadium pentoxide for use as vanadium electrolyte in VRFBs, but will also have a saleable product that can be utilised for the global steel market.
Traversing a proposed ASX listing
In August, Velox locked in a commitment for cornerstone investment from the QIC Critical Minerals and Battery Technology Fund (QCMBTF), a fund managed and administered by QIC.
Brisbane-headquartered QIC is owned by the Queensland Government and has over $100 billion in assets under management – making it one of the largest institutional investment managers in Australia.
The cornerstone investment is intended to support a capital raise proposed to be undertaken by Velox to facilitate a proposed dual listing on the Australian Securities Exchange (ASX). Investors are cautioned that there is no guarantee that the ASX will approve Velox’s proposed ASX listing.
In accordance with section 734(5)(b) of the
Corporations Act 2001 (Cth) (Corporations Act), it is noted that:
- Velox will be the offeror of Chess Depository Interests (CDIs) under the proposed capital raising;
- a prospectus will be issued by Velox in accordance with Part 6.2 of the Corporations Act when the CDIs are offered;
- a person should consider the prospectus in deciding whether to apply for CDIs; and
- eligible subscribers who wish to apply for the proposed capital raising will need to complete an application form that will be in or will accompany the prospectus.
QCMBTF has conditionally agreed to participate in the dual listing capital raising with a cornerstone investment of between $4 million and $5 million, dependent on the amount raised from other investors, and subject to the satisfaction of certain conditions.
At the time of the commitment, QIC state chief investment officer Allison Hill said up to 2 million tonnes of vanadium is required for battery storage to decarbonise industries and communities globally under 2050 net zero targets, while total global production in 2023 represented approximately 5% of this figure.
“This sizable deficit demonstrates the significant opportunity that proponents like Velox allow Queensland to harness in the next critical minerals resources boom,” Hill says.
“Some of the world’s biggest and best vanadium resources are found in Julia Creek, where multiple drill-ready targets across the North Queensland Vanadium Project’s 1,200km2 site give Velox distinct advantages in exploration and mineralisation potential.”
Write to Angela East at
Mining.com.au
