Australian Vanadium (ASX: AVL) has collared an agreement to explore supplying vanadium pentoxide and vanadium electrolyte to German vanadium redox flow battery (VRFB) manufacturer SCHMID.
Under the letter of intent, Australian Vanadium will look at supplying either vanadium pentoxide, vanadium electrolyte, or both from its flagship Gabanintha vanadium project in Western Australia.
Australian Vanadium managing director Vince Algar said the company had been progressing a relationship with SCHMID over the past three years.
“These letters of intent solidify our plans with them moving forward,” he added.
“For a vanadium redox flow battery manufacturer, it is crucial to secure an ongoing supply of vanadium and with our high-grade vanadium deposit moving steadily towards production, we look forward to working closely with SCHMID as a potential client,” Mr Algar said.
Concurrent to Australian Vanadium’s agreement with SCHMID, Australian Vanadium’s wholly-owned subsidiary VSUN Energy has also secured a letter of intent with the German battery manufacturer.
The agreement between the parties paves the way for VSUN to offer its potential clients SCHMID’s EverFlow large scale and telecom VRFBs.
“Having the relationship as a two-way partnership with VSUN Energy promoting the EverFlow systems provides a collaborative space for us to do business,” Mr Algar noted.
Australian Vanadium established VSUN to develop VRFB technology to sell into world markets with the strategy of using Gabanintha ore as a feedstock.
VSUN first deployed a VRFB in 2016 when it installed a continuous stand-alone power system based on solar energy and VRFB technology.
The system was set up at tree nursery site in WA’s south west and since it was commissioned, the site has been 100% powered by solar energy and the VRFB battery.
It has not required grid power or alternative fuel.
Today’s news comes as vanadium continues its upward momentum, with the price for vanadium pentoxide hovering at 10 years highs of around US$19 per pound since July.
The vanadium pentoxide price has been steadily climbing since 2015 – powered by the strengthening steel sector and the emerging VRFB battery market.
Australian Vanadium hopes to target both sectors by building a low-cost, long-term and sustainable vanadium operation at Gabanintha that can weather cyclical highs and lows.
Meanwhile, VSUN plans to carve itself a slice of the VRFB market.
By midday, Australian Vanadium’s share price was steady at $0.057.