High Voltage: Bushveld backs $13bn vanadium battery outlook with redT-Avalon investment
Link copied to
Each week our High Voltage column wraps all the news driving ASX battery metals stocks with exposure to lithium, cobalt, graphite, manganese and vanadium.
Navigant Research reckons the stationary energy storage market is growing at a rate of 58 per cent a year and will surpass 100GWh and $US50 billion ($72 billion) annually by 2027. Flow batteries will capture an 18 per cent share of the total, it says.
That’s $13 billion a year for the nascent vanadium battery sector alone.
Which is why major vanadium miner Bushveld has established an investment platform (called VIP) to tap into vanadium battery original equipment manufacturers (OEMs) with “attractive upside potential”.
Last week, the $255m market cap miner announced an initial $US5m investment into the proposed merger of battery makers redT Energy and Avalon Battery.
The merger, which remains subject to due diligence by each party, also needs to raise at least $US30m to support growth plans.
$US5m isn’t a huge amount, but the redT-Avalon tieup would have “a global sales footprint, a robust near-term project pipeline, operations in North America, Europe and Asia, market-leading technology, and a strong management team”, Bushveld says.
This kind of larger-scale business is essential for vanadium battery tech to move into the mainstream.
And it is companies with direct IP — like redT and Avalon — that will capture a large portion of the value created within the energy storage sector, Bushveld chief exec Fortune Mojapelo says.
“The energy storage market presents a very large commercial opportunity, potentially exceeding $300 billion by 2030, with the combined redT-Avalon well placed to capitalise on this opportunity,” he says.
“This [investment] is a major leap forward in the development of our downstream energy business at an attractive price and prudent entry level.
“It also demonstrates our conviction in the VRFB technology’s potential and our ability to meet the vanadium supply needs of the energy storage industry.”
The major (non-Chilean) lithium miners had a fantastic week.
Pilbara Minerals (ASX:PLS), Galaxy Resources (ASX:GXY), and Orocobre (ASX:ORE) recorded gains of 23 per cent, 17 per cent and 14 per cent respectively, on news that protestors had blocked access to Chilean lithium operations in late October – all part of nationwide demonstrations over inequality, according to Reuters.
Chile’s Atacama salt flats are among the world’s richest reserves of lithium so there’s going to be a lot of interest in any potential long-term supply implications.
Other major lithium winners included advanced explorers ioneer (ASX:INR), European Lithium (ASX:EUR), AVZ Minerals (ASX:AVZ) and Liontown Resources (ASX:LTR) – which is up an incredible 404 per cent over the past 12 months.
In the red this week is advanced nickel-cobalt play Australian Mines (ASX:AUZ), which fell 29 per cent after a comprehensive supply deal with South Korean battery maker SK Innovation was terminated.
Here’s a table of ASX battery metal stocks with exposure to lithium, cobalt, graphite, manganese and vanadium>>>
Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop: