Australian Vanadium Signs MoU with Chinese Steel Producer

Australian Vanadium Limited (ASX:AVL) reports it has signed a non-binding memorandum of understanding (MoU) with the Win-Win Development Group, private steel and alloy producer based in Chengdu, China. Australian Vanadium is the sole owner of the Gabanintha project near Meekatharra in Western Australia.

As quoted from the press release:

Highlights:

• An MoU has been signed with Win-Win Development Group, a Chinese steel and alloy product company.
• The agreement initiates discussions surrounding project finance and offtake of vanadium oxides from Gabanintha
• Products to be used in production of vanadium carbon nitride (VCN) for use in area of micro-alloy rebar production.
• Win-Win’s project timeline is strongly aligned with AVL’s planned development of Gabanintha.
  Relationship initially built by AVL’s China consultancy Mastermines.
• New Chinese rebar standard, due to be implemented in October 2018, requires additional use of vanadium with supplies inside China strongly constrained and VCN is the preferred alloy to meet the specification.

Win-Win is currently building a 5,000tpa vanadium carbon nitride (VCN) production line which requires approximately 7,000-8,000tpa of 98 percent V₂O₅. The first stage will require 2,000-3,000tpa and be operational in 2019 and the second stage is planned for the following year. Win-Win has a shareholding in an operating production line currently producing 2,400tpa of VCN products for existing steel companies.

The timing of the Win-Win development and full production has strong synergies with the planned development of the Gabanintha vanadium project.

“The Win-Win team are fully in-tune with the needs of the vanadium alloy market in China. Their development plans will set them up as a significant supplier of VCN to feed the rising demand for this feedstock as the new rebar standards are implemented. WinWin has undertaken due diligence and identified AVL’s Gabanintha project as the one most likely to be able to provide the grade and quantity of product they require for the future,” said Vincent Algar, AVL’s managing director.

Click here to read the full press release