Why vanadium explorer Pursuit Minerals is in the right place at the right time
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Special report: Pursuit Minerals couldn’t have timed its foray into vanadium any better – and it’s right on the doorstep of the energy storage revolution.
Earlier this year the explorer (ASX:PUR) picked up projects in northern Finland and Sweden.
The Finnish government has ramped up its push to be at the forefront of battery technology and wants to re-establish itself as a substantial vanadium producer.
The country, which once produced about 10 per cent of the world’s vanadium, wants to do everything from mining to refining to making batteries and it is backing those companies that can help it do that.
“I think ultimately our move into Scandinavia, into vanadium, really was a case of the right commodity at the right time and the right place,” managing director Jeremy Read told Stockhead.
Vanadium is the best performing battery metal – more than doubling in the past year and rocketing over 300 per cent since January 2016.
Regulatory moves in China have largely driven vanadium demand in the past 12 months.
China, which supplies around 50 per cent of global vanadium, is using more of its output internally following new rules to double rebar (or steel reinforcing bar) requirements used to make stronger concrete for building construction.
Vanadium is a key ingredient in rebar.
At the same time the Asian heavyweight has shuttered polluting mines, reducing its output by about 10 per cent.
Battery demand growing
Traditionally the steel industry consumes around 90 per cent of global vanadium, but demand from the renewable energy battery sector is starting to take-off.
“Looking forward we believe that it is going to be the use of vanadium in batteries that is going to continue to really drive a substantial increase in the global consumption of vanadium,” Mr Read said.
Vanadium redox flow batteries (VRFBs) have become the preferred solution for renewable long duration energy storage because they are cheaper and have the longest life spans, lasting more than 20 years or up to 25,000 cycles.
They require little maintenance and can be fully discharged without damage to their storage capacity.
They use two tanks of vanadium pentoxide (V₂O₅) solution that have been processed into a liquid electrolyte.
When the electrolyte is pumped through electro-chemical cells past a proton-exchange membrane, ions are swapped between the negatively and positively charged electrolyte, creating an electrical charge.
The VRFB is inherently more stable than lithium-ion because the electrolytes are just a positively and negatively charged version of the same chemical and the process of charging and discharging does not generate excess heat.
Europe and China lead the charge
While VRFBs are actually an Australian invention, it is Germany and China that are largely leading the take-up of the technology for renewable energy storage.
Germany is developing “microgrids” designed to capture renewable energy close to where it is generated.
The idea is that the electricity that is generated from solar or wind powered homes can be stored locally and then transferred back into the main grid.
VRFBs are much more suitable for large-scale energy storage than lithium-ion batteries because they can discharge electricity over a much longer period.
Germany is looking at building a VRFB that can store enough energy to power Berlin for a an hour, which would be a big step forward from the Tesla lithium-ion battery built in Australia which only has the capacity to provide 2 per cent of Adelaide’s power requirements at any time.
In China, Rongke Power in Dalian province is building the largest battery in the world, an 800MWh VRFB, while in Hebei province Pu Neng Energy is building a 500MWh version.
Vanadium demand for VRFBs is growing at such a rapid rate. The forecast compound annual growth rate for vanadium to be used in VRFBs is 60 per cent.
Demand set to triple
Current demand is about 100,000 tonnes per annum, but that is tipped to triple over the next five to six years.
To meet that demand a significant number of new projects are going to need to come online.
Pursuit already has historic resources at its Koitelainen and Karhujupukka projects in Finland and it is working to convert those into JORC-compliant resources.
JORC refers to the mining industry’s official code for reporting exploration results, mineral resources and ore reserves, managed by the Australasian Joint Ore Reserves Committee.
Once Pursuit has updated the resources for the two projects it will start drilling during the northern hemisphere winter, which starts in October.
This special report is brought to you by Pursuit Minerals.
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