The Ins and Outs of Vanadium

The Ins and Outs of Vanadium

Vanadium, a silvery transition metal, is primarily used to galvanize steel, making it lighter and significantly increasing its strength. New research has also shown it can be used as an energy storage unit for electric vehicles and buildings, raising its profile to a growing market.

Batteries, electric cars and even jet engine parts all harness vanadium as both an energy storage and construction material. The metal has been enjoying a new lease on life as researchers examine its usefulness in batteries and energy-efficient cars. But what exactly is the metal and how does it fit in today’s world?

Vanadium supply 

Vanadium is a hard, silvery metal not found in nature, but produced as a compound from other minerals. China, Russia and South Africa are considered the leaders in vanadium production. In 2013, China accounted for roughly 53 percent of all vanadium production, with South Africa a distant second. Russia, meanwhile, rounded out the top three, producing about 10 percent of all vanadium in 2013.

The bulk of the world’s vanadium supply comes from South Africa’s Bushveld Complex, which produces about 23 percent of global supply. In the race to compete in the growing vanadium market, other exploration for vanadium has brought companies to several other countries.

Most recently, Largo Resources (TSXV:LGO) began, and is now ramping up, vanadium production in South America. Largo Resources owns and operates the Maracas Menchen mine in Brazil, and its goal is to produce 9,600 tonnes of vanadium in one year. The mine started producing vanadium in August 2014, with production planned to escalate over the course of the year.

Closer to home, North America usually produces vanadium as a by-product from oil production and from oil residue, accounting for roughly 5 percent of the world’s vanadium. However, with oil production dwindling on the continent, companies have placed an emphasis on finding a local source.

American Vanadium (TSXV:AVC) has placed its attention on deposits in Nevada, with plans to use the material to create vanadium-redox batteries. Canadian company VanadiumCorp (TSXV:VRB) has an early stage project known as Lac Dore, and the company believes it can become a big-time North American supplier of vanadium. VanadiumCorp is seeking to tap into the steel market, but the company’s CEO said in an interview with Vanadium Investing News that the company will enter the battery market if the endeavour proves profitable.

Over in Africa, Energizer Resources (TSX:EGZ) believes its project in Madagascar has the potential to be one of the largest sources of vanadium in the world. However, further exploration and development of the property has been put on hold as Energizer develops its Molo graphite deposit. Syrah Resources (ASX:SYR) is exploring a project in Mozambique to examine its potential for vanadium production.

Meanwhile, companies like Atlantic (ASX:ATI) and TNG (ASX:TNG) are working on developing some of the vanadium found in Australia. Atlantic’s Windimurra vanadium mine is located 600 kilometers outside of Perth in Western Australia, while TNG’s Mount Peake vanadium-titanium-iron project is located in the country’s Northern Territory.

Demand

The metal has been traditionally used to form ferrovanadium, which is an additive that makes steel lighter, as well as resistant to shock and corrosion. It commonly ends up used in the production of parts for airplanes, crankshafts, axles and gears. Less than 0.1 percent of vanadium is needed to double the strength of steel. That said, the steel industry consumes about 85 percent of produced vanadium, with pipeline construction alone accounting for roughly half of that.

Demand for vanadium has steadily grown since the start of the 21st century. Despite a slight blip in 2009, where the market shrunk by 15 percent, demand has remained high. In 2012, the world consumed roughly 80,000 tonnes of the metal. Roskill forecasts that from 2012 to 2017, demand will increase by about 28,000 tonnes, largely due to increased steel production and a growing construction sector.

China, a large producer of vanadium, is also the largest user of vanadium. The country uses the metal in its construction industry. With a booming construction industry, vanadium demand has been projected to increase as much as 40 percent.

While vanadium, and by extension ferrovanadium, has a continued strong presence as an additive to steel products, a new market has emerged for the metal: batteries. Vanadium can be used in the production of lithium-ion batteries found in electric vehicles. Batteries using vanadium have shown an ability to rapidly release large amounts of electricity while also being able to maintain a ready state for long periods.

Vanadium-redox batteries also of course use vanadium and are emerging as a new form of energy storage. Though a lot of work still needs to be done on making vanadium-redox batteries a mainstream reality, they are an energy storage solution that is starting to take off.

One of the companies making strides in the vanadium-redox battery sector is American Vanadium, which has teamed up with Germany’s Gildemeister to work on providing the North American market with a stable energy storage product, the CellCube. To support the endeavour, the company is looking at the potential to use the vanadium produced at its Gibellini project in Nevada.

In order to make the dream of vanadium-redox batteries a reality, a stable, steady source of vanadium will be required. Unfortunately, outside of China, Russia and South Africa, there is very little vanadium being produced globally to meet this rising demand.

As such, the battery market remains in progress, with companies looking for the best way to harness the developing industry, and steel still being the primary focus for many vanadium miners.

 

Securities Disclosure: I, Nick Wells, hold no direct investment interest in any company mentioned in this article.

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