As the steel industry continues to strengthen and the vanadium redox flow battery sector expands, vanadium demand is not expected to abate any time soon, with many ASX-listed mineral exploration stocks turning their attention to the commodity in recent years hoping to capture a slice of this firming market.
Very few industrial metals are thought of as being beautiful but vanadium is one that is.
Capable of being found naturally with a wide range of bright colours as different compounds, vanadium’s name traces back to its exotic heritage, being named after the Swedish Goddess of beauty and fertility Vanadis.
Now, however, it is investors that are belatedly finding a lot of beauty in vanadium, not for its usual role in producing high strength specialty steel alloys but as a battery ingredient that shows immense promise in providing emergency power and stabilising electricity grids around the world.
Elon Musk has shown what is possible
Elon Musk’s large lithium-ion battery plant in South Australia has shown that there is serious money to be made in stabilising the power grid by storing power when it is plentiful and cheap and discharging it during price spikes.
Experts believe vanadium flow batteries, also known as vanadium redox flow batteries, show even more promise in stabilising power grids in an era of waning coal generation and rising renewable energy.
While vanadium might not have a high profile entrepreneur such as Elon Musk advancing the technology like lithium batteries do, the unique properties of vanadium flow batteries are seen as being so superior that they will emerge as a strong alternative anyway.
What is vanadium?
Vanadium is a fairly scarce transition metal in nature, which is perhaps why it had a couple of false starts before finally being recognised.
Originally discovered by Andres Manuel del Rio in Mexico in 1801, what was then known as brown lead then lost recognition after Manuel was wrongly convinced by other scientists that he was actually looking at various compounds of chromium.
It was rediscovered and named in 1830 by Nils Gabriel Sefstrom but it was not until 1867 that Henry Enfield Roscoe obtained pure vanadium metal, which is hard although malleable, grey and silvery and oxidises on the surface readily, protecting the metal underneath.
Vanadium would go on to achieve world-wide fame, being used in the steel alloy chassis of the first mass produced Ford Model T to reduce weight and increase strength, as well as being used in many racing cars.
It is as an alloying agent that Vanadium is still predominantly used today, with 85% of production going to make items such as axles, bicycle frames, crankshafts, gears and a wide range of high speed tool steels.
However, it is the use of vanadium in vanadium flow batteries that has really caught the attention of investors recently, pushing the price of the metal up by more than 130% in the past year – a bigger price rise than for other “hot’’ battery metals such as cobalt, lithium and nickel.
The price has been driven by tight supply and strong orders from the steel industry, plus the opinion of many experts that vanadium flow batteries will eventually overtake lithium batteries for large scale uses such as grid stabilisation battery plants because of longer life and greater stability.
Vanadium also shows potential to be used in other forms of batteries, with lithium vanadium oxide a potential high energy density anode for lithium-ion batteries while vanadium phosphates could be used as a cathode in lithium vanadium phosphate batteries, another form of lithium-ion battery.
Which battery is better?
While it is always difficult to sift through the competing claims for battery or any other technology, particularly before it has been effectively commercialised at scale, there are some clear reasons why vanadium flow batteries will eventually dominate in large industrial uses such as stabilising power grids.
As vanadium flow batteries use a liquid electrolyte rather than the more familiar solid “cell’’ construction, they are very easy to “scale’’ up or down – you simply change the size of the plastic tank used to house the electrolyte.
That means you can double the size of a vanadium battery and actually reduce the cost of electricity storage while if you did the same thing for a lithium battery that storage cost would have doubled.
Other advantages of vanadium batteries are a much longer lifespan of 20 years or more, a lack of overheating and other thermal issues, ease of manufacture, greater efficiency over time and during variations of temperature and the ability to source more vanadium from environmental hazards such as mine tailings, depleted oil wells and oil storage depots.
Which companies own vanadium?
Vanadium is a little unusual because it is rarely mined on its own, often occurring in vanadium-bearing magnetite iron ore, with most current production coming from South Africa, China and Russia.
Vanadium is also found in bauxite (used to produce alumina and finally aluminium) and in deposits of crude oil, coal, oil shale and tar sands.
That is why supplies could be found in mine tailings, depleted oil wells and oil storage depots, should the demand for and price of vanadium remain high enough to attract investment for vanadium extraction.
That means that a lot of current vanadium deposits are owned by companies whose main purpose is to mine or extract something very different such as oil, bauxite, iron ore, gold, copper or uranium.
Bear this in mind when looking at our list of ‘vanadium’ companies, given that many may produce it as a by-product, some might not even acknowledge they have vanadium and they may have no plans to extract vanadium at this stage.
For example, both BHP (ASX: BHP) and Rio Tinto (ASX: RIO) both own large amounts of vanadium and extract some but it would be a long bow to draw to buy shares in either global mining giant in the hopes of getting a price bump on vanadium, given the much larger scale of their other operations.
However, a sustained lift in demand and the price of vanadium would certainly cause even these mining giants and others such as Alcoa (ASX: AAI) and Bluescope Steel (ASX: BSL) to revisit their plans and perhaps increase or begin vanadium production should it be economic.
Vanadium stocks on the ASX
Let’s dig a bit deeper and see the various vanadium companies listed on the ASX and their unique stories.
Aura Energy (ASX: AEE)
Aura Energy has large uranium and poly-metallic projects in Europe and Africa and it is one of those in central Sweden that looks interesting for vanadium.
Häggån is one of the largest undeveloped vanadium polymetallic projects in the world, containing a resource of 7,870 million pounds vanadium, 1,640Mlbs nickel, 2,230Mlbs zinc, 1,070Mlbs molybdenum and 803Mlbs uranium.
Located in a sparsely populated area of swamp and forest used mainly for commercial forestry, the project has the advantage of Sweden’s clear regulatory position, which establishes a path from exploration to production.
One of the keys to the project is bioheap leaching, a method widely used in copper and gold industries with some application to the battery metals and uranium industry.
Australian Vanadium (ASX: AVL)
Formerly known as Yellow Rock Resources, Australian Vanadium is now heavily focussed on developing its Gabanintha deposit in Western Australia.
The latest mineral resource figures for Gabanintha is 179.6 Mt at 0.75% vanadium pentoxide (V2O5), made up of a Measured Mineral Resource of 10.2 Mt at 1.06% V2O5, an Indicated Mineral Resource of 25.4 Mt at 0.62% V2O5, and an Inferred Mineral Resource of 144 Mt at 0.75% V2O5.
Australian Vanadium also has a technology company subsidiary VSun Energy that is marketing vanadium flow batteries for a wide range of applications including grid storage for renewable power such as wind and solar and as backup power.
VSun claims that the big advantages of vanadium flow batteries is that they are scalable, have a 20 year lifespan, release energy immediately with a charge retention of up to a year and the ability to discharge fully with no damage or loss.
VSun also says the batteries are inherently safe, being non-flammable and non-explosive and can be cycled many thousands of times with much less capacity degradation compared to alternatives.
Golden Deeps (ASX: GED)
Golden Deeps is exploring extensive leases in northern Namibia using modern mining methods.
It is looking for ore extensions from current mines, which include globally significant copper, zinc, lead, silver and vanadium mines.
The region is well served by sealed roads, high voltage power, telephone and water, rail to port and is close to major towns and mining processing facilities, including the Kombat copper concentrator and Tsumeb Smelter complex (one of only five operating smelters in Africa).
Its Grootfontein Project has a number of significant prospects near historical production centres located on its licence package.
These include the Askevold copper trend, the Abenab/Nosib copper-lead-zinc-vanadium trend and the Khusib Springs copper trend.
Intermin Resources (ASX: IRC)
Although focused on gold exploration, Intermin Resources has a 100% interest in the Richmond project in Queensland’s north west.
In September last year, Intermin inked an agreement with private company AXF Resources allowing AXF to earn a 75% stake in the project over four years.
As part of the agreement AXF will sole fund and manage technical and commercialisation studies by spending A$6 million. Intermin is free-carried to completion of the studies.
The project and pending permits cover about 1,550 square kilometres.
Richmond hosts a 2004 JORC resource of 3.3 billion tonnes with 0.40% V2O5 vanadium and 295g/t molybdenum mineralisation.
A 2004 JORC-compliant estimate that includes the pending mineral development licence area sits at 5.308bt grading 0.375% V2O5 and 295g/t molybdenum.
To-date, AXF has collected about 1.2mt of vanadium ore for metallurgical testing, with results expect in the June quarter.
An updated JORC-compliant resource is due by the end of March.
King River Resources (ASX: KRR)
King River Resources’ Vanadium project at Speewah in the Kimberley area of Western Australia is claimed to be Australia’s largest vanadium in magnetite deposit.
Measured, inferred and indicated mineral resources reveal 4,712 million tonnes at 0.3% V2O5 and 14.5% iron.
Advanced metallurgical test work has successfully produced high purity titanium dioxide (TiO2) and vanadium pentoxide products, the latter of which is capable of being used in vanadium flow batteries.
The company envisages using an open pit mine on the central deposit and separation, leaching and precipitation processing to produce a vanadium product suitable for vanadium flow batteries.
Neometals (ASX: NMT)
Neometals and its partners have started production at the jointly owned Mt Marion lithium mine and are also developing the Kalgoorlie lithium hydroxide facility.
However, the soaring price of vanadium and titanium has not gone unnoticed and has greatly increased the attraction of its Barambie project in Western Australia.
It is one of the world’s highest grade hard rock titanium projects but also contains a higher grade vanadium deposit in the central zone.
Neometals is now looking at a variety of options including direct shipping of ore to China with a focus on either titanium or vanadium or producing a semi-finished product including both metals itself.
Protean Energy (ASX: POW)
Protean Energy is heavily involved in various energy storage and generation methods including wave power, compressed air storage systems and a stake in a company that has developed a vanadium redox flow battery energy storage system.
The batteries employ vanadium ions in different oxidation states to store energy in the form of two liquid electrolytes which can be designed for highly specific energy and power requirements.
The batteries are an ideal solution for broadening the availability of renewable energy generation sources such as wave, tidal, solar and wind.
Protean is also developing three projects in South Korea through its 50% holding in Stonehenge Korea Limited (SHK).
SHK owns 100% of the Daejon, Miwon and Gwesan projects, which are being targeted for both vanadium and uranium.
Sabre Resources (ASX: SBR)
Sabre Resources is another company similar to Golden Deeps which is active in northern Namibia and is exploring for a wide range of minerals.
Its exploration portfolio covers two licence areas totalling more than 800 square kms which contains more than 60 known copper, lead, zinc & vanadium occurrences.
Sabre’s prospect areas range from grassroots geochemical targets through to resource delineation at the Guchab mining centre and a move to feasibility on the zinc-lead deposits on the Pavian and Hoek Trends.
Sabre is hoping to establish copper and zinc-lead resources for future development but it would not be a surprise for a vanadium discovery to occur for a potential polymetallic mine.
Syrah Resources (ASX: SYR)
Known for its flagship and recently commissioned Balama graphite mine in Mozambique, what few punters may remember was the project’s vanadium prospectivity.
Up until 2015, Syrah Resources’ flagship project was known as the Balama graphite and vanadium project in Mozambique.
In mid-2014, Syrah finalised a scoping study that explored producing vanadium in conjunction with graphite at Balama. Metallurgical test work during the study produced a 99.9% pure vanadium pentoxide.
At the time, the project’s resource was 1.15 billion tonnes grading 10.2% total graphitic carbon and 0.23% vanadium.
According to Syrah, the Balama vanadium resource is four times larger than the world’s largest operating vanadium deposit in South Africa.
The scoping study revealed up to 255,000tpa of V2O5 could be produced for 20 years after an US$80 million capital expenditure and generate annual EBITDA of US$85 million.
In mid-2015, in its final feasibility study for Balama, Syrah reported it would progress the vanadium resource to a full feasibility study once the graphite part of the project had been commissioned.
While mining Balama graphite, the vanadium-bearing concentrate will be stored as tailings.
Tando Resources (ASX: TNO)
Tando Resources is a newcomer to the vanadium space after securing an agreement to acquire 74% of the SPD project in South Africa.
Previous project operators delineated a resource under the SAMREC Code (2007) of 513.3mt grading 0.78% V2O5.
The operators also intersected high grade and thick vanadium mineralisation while undertaking two rounds of reverse circulation and diamond drilling with better results including 9m at 1.34% V2O5 and 10.5% TiO2, and 14m at 1.08% V2O5 and 7.07% TiO2.
Tando has until the end of April to complete due diligence and if it elects to proceed with the acquisition it will pay a total amount to the vendors of 35 million shares at A$0.30 each. Share issues will be made in stages upon reaching certain milestones.
The first payment after completing due diligence will involve issuing 4.25 million shares, which will give Tando an immediate 12.5% stake in SPD.
Technology Metals Australia (ASX: TMT)
Technology Metals Australia is focused on advancing its Gabanintha vanadium project about 40km from Meekatharra in WA’s mid-west.
The project’s Northern Block has an inferred resource of 62.8mt grading 0.8% V2O5, 35.9% iron, 10.8% aluminium, 18.3% silicon, 9.7% titanium and 3.2% LOI, with an upgrade due to be released shortly.
A maiden resource estimate of 21.5mt grading 0.9% V2O5 for Gabanintha’s Southern tenement was published in mid-December last year. This resource included a higher-grade portion of 10.4mt grading 1.1% V2O5.
In late February, the company reported it had recovered up to 97.8% vanadium in magnetic concentrates during metallurgical test work. Concentrate vanadium grades of 1.3% and higher were also extracted from the higher-grade zones.
The results came from composite samples from the project’s Northern Block.
Technology Metals Australia reported it would continue with its test work program to assess the Northern Block resource and evaluate downstream processing using tradition salt roast and leach methods.
TNG Limited (ASX: TNG)
TNG’s main focus is an iron-vanadium-titanium project at Mount Peake, about 230 kms north of Alice Springs in the highly prospective Arunta Province of the Northern Territory.
The deposit was discovered in 2008 when TNG outlined a magnetite-bearing gabbro containing high-grade vanadium, titanium and iron, with shallow mineralisation making it suitable for open pit mining.
Mount Peake currently has a total JORC Resource estimate of 160Mt @ 0.28% vanadium (V2O5), 5% titanium (TiO2) and 23% iron (Fe), 118Mt of which is a Measured Resource status.
A feasibility study finished in July 2015 forecast a 20 year mine life, cash flow of A$11.6 billion, a net present value of $4.9 billion and a pre-tax internal rate of return of 41%.
The project is strategically located close to existing power and transport infrastructure, including the Alice Springs-Darwin Railway, the Stuart Highway and the LPG pipeline.
Triton Minerals (ASX: TON)
Another graphite play with a foot in the vanadium space is Triton Minerals.
The company reported it was in ongoing negotiations for joint venture opportunities regarding Nicanda Hill in Mozambique, which Triton claims hosts one of the world’s largest combined graphite and vanadium deposits.
Towards the end of 2015, Triton reported an upgraded resource estimate for Nicanda Hill of 1.44 billion tonnes grading 11.11% total graphitic carbon and 0.29% V2O5 for 160.32Mt of contained graphite and 4.22Mt of contained vanadium.
Initial metallurgical test work on vanadium in the process tailings produced vanadium concentrate grading up to 0.75% V2O5.
In 2016, when the resource estimate for Nicanda Hill was restated, the vanadium component was not taken into account because no further metallurgical work had been undertaken in that period.
By January 2018, little further work regarding liberating the vanadium content had been undertaken at Nicanda Hill.
Venus Metals (ASX: VMC)
Venus Metals certainly lives up to its name with a wealth of different metals in a variety of projects, including nickel, gold, copper, lithium, tantalum and even iron ore.
However it is its Youanmi Vanadium Project that is of most interest to us.
Located about 42 kms southeast of Windimurra in WA, the area was drilled by Australian Gold Resources in the late 1990’s.
From that sampling a Pre-JORC Inferred Resource of 136 Million Tonnes grading 0.42% V2O5 (cut-off 0.27% V2O5) was arrived at, with further drilling confirming thick layers of Vanadiferous Magnetite.
Widenbar and Associates have since produced an inferred Mineral Resource Estimate for the Youanmi Vanadium Deposit, showing two high grade mineralised domains, with low grade domains lying between and above them.
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