High Voltage: ‘Mega scale’ capacity could blow the lid off vanadium demand. These advanced ASX stocks will benefit
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Our High Voltage column wraps all the news driving ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, manganese, magnesium, and vanadium.
The vanadium market is largely driven by steel consumption, with up to 92% sold as ferrovanadium (a mixture of iron and vanadium).
This market is projected to grow by an average 1.4% a year between 2021 and 2050. Solid.
However, steel’s market share is expected to fall to 75% by 2050, as vanadium redox flow battery (VRFB) installations provide significant upside.
Consumption from VRFB’s is forecast to grow at an average 10.6% a year over the same period, albeit from a low base.
That’s according to WoodMac, who also says new supply will be needed from 2029 as demand overtakes supply.
VRFBs are considered safer (they dont catch fire), more scalable, and longer lasting than their lithium counterparts with a lifespan of more than 20 years.
There are also coming to the fore as experts increasingly agree that there won’t be enough raw materials to supply lithium-ion batteries for both EVs and stationary storage applications.
“Is it sustainable to focus exclusively on lithium-ion battery chemistry”
Which is why it is so important that alternatives for grid scale #EnergyStorage such as the #Vanadium based #VRFB #flowbattery are now gaining traction.#CitySafeBattery #BushveldEnergy https://t.co/aphIrkeC45
— BushveldPerspective (@BMNperspective) August 14, 2022
Most of the current vanadium produced is as a by-product of magnetite or uranium processing, with a limited supply of battery grade material, says Richmond Vanadium Technology (ASX:RVT) managing director Shaun Ren.
“The vanadium industry is very concentrated. China supplies 70% of vanadium to the market, and rest mostly comes from South Africa and Russia, with a small amount from Brazil,” he told Stockhead.
“Much of that is a product called ferrovanadium, which is used to strengthen steel.
“To purify ferrovanadium to battery grade vanadium is an additional cost. So, the production of battery grade material is just beginning right now.
“At the same time, the development of vanadium redox flow batteries for mega scale energy storage is developing very quickly.”
The largest VRFB development in the world, the Dalian/ Rongke Power energy storage system, was connected to the Chinese power grid in May 2022.
The energy system currently has a capacity of 100 MW/400 MWh, although a second phase of construction intends to increase its total capacity to 200 MW/800 MWh. And it could be just the start.
#Vanadium demand continues.
Pangang Group and Dalian Rongke Power signed an agreement on vanadium battery #energystorage material in Dec. to purchase & sell approx. 8k tons of V2O5 eq. in 2023, representing approximately 4% of global vanadium supply.
— Largo Physical Vanadium (@LPVanadium) January 4, 2023
As Roskill’s steel alloys principal consultant Erik Sardain told us in 2021 – “It is early days” for the VRFB sector.
“Our base case is that by 2030, 10% of vanadium demand is going to come from batteries [up from ~1% currently],” he says.
“But if the tech develops, this estimate will be far too low; if it doesn’t take off, that estimate is far too high.”
One thing is clear — China will be the driver if the technology is to succeed.
“I strongly believe that the VRFB technology is going to come from China, or it is not going to happen,” Sardain says.
“If the Chinese demand take off the rest of the world will follow.”
Alongside this nascent growth in VRFB demand is an influx of fresh blood on the ASX, with both Critical Minerals Group (ASX:CMG) and Richmond Vanadium Technology listing last year with advanced projects.
They join a small but advanced group of stocks hoping to meet this projected supply shortfall.
Formerly part of gold explorer Horizon Minerals (ASX:HRZ), RVT listed December last year following a $25m IPO.
Its advanced 1.8Bt Richmond project in Queensland is the largest non-titanomagnetite vanadium deposit of its kind (soft marine sediments) globally.
That gives it cost advantages over titanomagnetite deposits, it says.
IPO funds raised will primarily be used to complete a Bankable Feasibility Study – the most advanced of all project studies — and progress approvals for development.
CMG listed in September last year following a $5m IPO.
It’s main game is the Lindfield vanadium project in Queensland, which has a resource of 210Mt at 0.39% V2O5 (vanadium pentoxide).
A recently completed drilling campaign will be used to add to the existing JORC resource, and complete metallurgy and pilot plant test work and a scoping study. These drill results are pending.
CMG also has Japanese petroleum heavyweight Idemitsu on the register, with the conglomerate holding a 32% slice of the company.
Here’s how a basket of ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, magnesium, manganese, and vanadium is performing>>>
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