Big Chinese vanadium player wants a chunk of TMT’s top-quality vanadium
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Special Report: The high quality of Technology Metals Australia’s vanadium has attracted a Chinese major to the table.
Emerging producer (ASX:TMT) has inked a non-binding memorandum of understanding (MoU) with rare metal manufacturer CNMC Ningxia Orient Group Company (CNMNC) — a China Nonferrous Metal Mining (Group) company, which will pave the way for a binding vanadium supply deal.
CNMNC is a top 10 producer of vanadium alloys in China, producing both vanadium-nitrogen and ferrovanadium alloys for the domestic steel industry.
Technology Metals managing director Ian Prentice said the agreement with CNMNC was a key step in establishing a strong and supportive customer base for the development of the high-quality, globally significant Gabanintha vanadium project.
“The very high purity of the Gabanintha vanadium pentoxide (V2O5) product provides a clear competitive advantage for the project,” he said.
The MoU between Technology Metals and CNMNC establishes a framework for ongoing discussions and negotiations aimed at delivering a definitive and binding offtake agreement over the coming months.
Key terms that have already been agreed to include the supply of 2,000 tonnes of vanadium per annum from Gabanintha on a take-or-pay basis.
This means that CNMNC agrees to take the product from Technology Metals or pay a penalty.
The contract would be for an initial three years with an option to renew for a further three years.
“We are very pleased to be establishing this relationship and engaging in offtake discussions with Technology Metals Australia as they progress the development of the very high quality, low-cost Gabanintha vanadium project,” Yi Junping, party secretary & deputy general manager of CNMNC Special Materials Co., said.
Technology Metals is advancing rapidly towards production and is closing in on the completion of a definitive feasibility study (DFS), which is slated to be delivered mid-2019.
The DFS is an important milestone for potential offtake partners and financiers.
The Gabanintha project near Meekatharra in Western Australia is shaping up to be a large, long-life, low-cost mine.
Technology Metals is confident its DFS will improve on its already excellent base case pre-feasibility study.