Green Energy: Neometals eyes second supply deal for zero carbon vanadium project

The inventive and organised Swedes have established themselves as one of the most technologically advanced countries in the race to decarbonise and electrify mining.

Our Scandinavian counterparts have established themselves as the leaders in the race to develop commercial-scale “green steel”, with the Hybrit consortium announcing the first production at pilot scale for car maker Volvo last month.

That doesn’t mean ASX-listed companies cannot get in on the act, and Neometals (ASX:NMT), an early mover in a host of battery metals initiatives from lithium to battery recycling, has been eyeing the sector closely.

Neometals and its partner Critical Minerals have inked a second deal to receive “high-purity vanadium slag” for its 50-50 JV, this time from green steel developer H2 Green Steel.

H2GS is planning a fully automated green steel plant with Boden in Northern Sweden, about 35km from Lulea, the location of the Hybrit plant.

While the agreement is non-binding at this stage, it would see up to 4Mt of vanadium slag delivered from H2GS into Neometals’ vanadium recovery project over 10 years.

That would be on top of a similar deal announced last April with fellow Scandinavian steelmaker SSAB, one of the partners in the Hybrit project.

The slag from SSAB would be processed at a 200,000tpa plant in Finland and converted into a “zero carbon” vanadium product for use in applications like vanadium batteries.

The H2GS product could underpin a second plant to be based in Boden, with a higher capacity of 400,000tpa.

“Neometals has been working with Critical to evaluate other opportunities, to build a pipeline of suitable feedstock sources to increase future production of potentially zero-carbon, high-purity vanadium chemicals for the energy storage market,” Neometals managing director Chris Reed said.

“Importantly, the proposed H2GS plant and potential second Slag processing plant are located in Boden just up the road from SSAB stockpiles in Lulea.

“We are confident that the H2GS Slag may too contain very high-grade vanadium given the domestic source of the iron-ore feedstocks. We look forward to our collaborative working relationship with Critical to evaluate this and other potential opportunities.”

Neometals share price today:

Green steel planned to curb European emissions

Steel production in Europe pales in comparison to the scope of the Chinese market, where around half of the world’s crude steel is churned out.

But it remains a significant impost on the environment, accounting for around 25% of Europe’s total CO2 emissions.

The world can’t exactly do without steel to fuel infrastructure, building, construction and even the energy transition itself, so work is under way by a handful of companies and researchers to remove coking coal from the steel production process and produce ‘green steel’.

In its initial funding round, the Vargas-owned H2GS received backing from some of Europe’s largest companies to the tune of US$105 million, including Mercedes Benz, SMS Group and Scania.

Neometals’ vanadium recovery project would utilise a waste product from a zero carbon process. A feasibility study is underway to confirm positive results from a PFS in May, which showed it could produce 13.43Mlb a year of vanadium pentoxide at “lowest quartile” operating costs of US$4.25/lb.

The plant would cost US$183.4m, with an IRR of 31.2%, NPV of US$230.5m and payback period of under four years.

A pilot plant recently confirmed its ability to produce a 99.5% vanadium pentoxide product at estimated recoveries of up to 75% with 14t of vanadium-bearing slag from Scandinavian steel mills.

Hazer shares take a hit as hydrogen play restocks

Hydrogen early mover Hazer Group (ASX:HZR) is working towards the completion of its commercial demonstration plant at the WA Water Corporation’s Woodman Point facility in Perth.

It has had a few setbacks along the way, with cost blowouts of 29% over its initial June 2020 budget to $21-22m announced earlier this year and recent supply chain delays out of China pushing back its commissioning date from December 2021 to the first quarter of 2022.

Hazer plans to use a patented process to produce graphite and hydrogen from methane that is 50% cleaner than hydrogen produced from fossil fuels via conventional steam methane reforming processes.

It came out of a trading halt today with another $7 million in backing in a placement and will run a $7 million share purchase plan for existing shareholders to bolster its bank balance.

The 92c a share placement was undertaken at a 14.5% discount to Hazer’s last traded price of $1.075, with the ~$150 million capped company copping a 9.3% hit as of 12.30AEST to trade at 97.5c.