While some companies are stuck dragging their anchor, it’s full steam ahead for Largo Resources (TSXV:LGO), whose sights are set on production in the very near term at the Maracas vanadium project in Brazil.
The company has been diligently working on getting the kiln ready for vanadium production. In its latest press release, Largo notes that there have been “certain minor technical adjustments” at several areas of the plant that have “required intermittent interruptions to operations.” However, despite temporary feed disruptions, material has been successfully processed through the kiln.
Meanwhile, mining is on track and the crushing system, mill and beneficiation plant are all fully operational, with over 10,000 tonnes of vanadium concentrate ready to crank through the kiln.
Commenting on the company’s progress, COO Michael Mutchler stated, “[t]he mechanical issues we have encountered are all typical of start-up at new operations — as such, temporary breaks have been anticipated and budgeted for in our conservative ramp-up schedule. The material we have been receiving out of the kiln and into the leach has been of extremely good quality despite the feed interruptions, resulting in vanadium recoveries that are generally in line with original predictions, and we do not foresee at this time any critical issues with the facility.”
A market in need
When it comes to steel making, vanadium is an important additive that assists in making the material stronger and lighter. With the Maracas project well underway, Largo expects to capture some 7.5 percent of the global vanadium market within a year.
As CEO Mark Brennan told Mining Global, Maracas is “one of the first vanadium mines that will be going into production in a long time.”
And with Asia looking like it will be the fastest-growing market for vanadium, the start up of Maracas couldn’t come at a better time. As Brennan told The Wall Street Journal, vanadium production comes primarily from China, South Africa and Russia. However, some of the smaller producers in China are struggling due to environmental regulations, which are driving up costs.
For its part, Largo has a six-year offtake agreement in place with Glencore (LSE:GLEN), the largest trader of vanadium, for 100 percent of all material produced from Maracas.
Securities Disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned.