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Invest in the Battery Metals Boom Today

 
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Alba Minerals Acquires Historic Vanadium-Uranium Project

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Andrew O’Donnell: Investors Need in on the Vanadium Story

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Formed in the Earth’s crust, vanadium is a silvery-gray transition metal that was first discovered in 1801. It is named after Vanadis, the Norse god of beauty, and occurs in about 65 different minerals, including vanadinite, carnotite and patronite. The metal is mined as a by-product of other metals, most commonly uranium. The technology metal is also found in deposits of phosphate rock, titaniferous magnetite, uraniferous sandstone and siltstone. It is also present in bauxite and in carboniferous materials such as crude oil, coal, oil shale and tar sands. Many investors believe the vanadium industry is compelling and are interested in getting involved in the market. Read on for a brief overview of the metal, from supply and demand to how to invest in...

Formed in the Earth’s crust, vanadium is a silvery-gray transition metal that was first discovered in 1801. It is named after Vanadis, the Norse god of beauty, and occurs in about 65 different minerals, including vanadinite, carnotite and patronite.

The metal is mined as a by-product of other metals, most commonly uranium. The technology metal is also found in deposits of phosphate rock, titaniferous magnetite, uraniferous sandstone and siltstone. It is also present in bauxite and in carboniferous materials such as crude oilcoal, oil shale and tar sands.

Many investors believe the vanadium industry is compelling and are interested in getting involved in the market. Read on for a brief overview of the metal, from supply and demand to how to invest in this exciting industrial metal.

Vanadium industry: Supply and demand

China was the world’s largest producer of vanadium in 2018 by far, contributing 40,000 metric tons (MT) to the vanadium industry. It was followed by Russia at 18,000 MT and South Africa at 9,100 MT. China also has the highest vanadium reserves globally.

Most vanadium in South Africa is mined from a formation known as the Bushveld igneous complex, and until 2014 the country was the second largest vanadium producer, accounting for 14 percent of the market. However, in 2015, Evraz Highveld Steel and Vanadium’s Mapochs mine closed, leaving only two vanadium-producing mines operating in South Africa.

In terms of demand, applications using vanadium have grown in recent years, contributing to price growth over the last year. Roskill’s latest vanadium market report says that 91 percent of vanadium is used as an additive in the steel industry to make high-strength steel that is lighter, stronger and more resistant to shock and corrosion.

Vanadium content of less than 0.1 percent is needed to double the strength of steel, and although other metals — including manganese, molybdenum, niobium, titanium and tungsten — can be interchanged with vanadium for alloying with steel, there is no substitute for vanadium in aerospace titanium alloys.

Over the last few years, China has increased its vanadium use, producing steel rebar with high tensile strength for construction.

Vanadium compounds are also used in nuclear reactors because they have low neutron-absorbing properties. Vanadium oxide is used as a pigment for ceramics and glass, and can act as a catalyst in the production of superconducting magnets.

In addition to the steel alloy sector, the metal is often used to make parts for jet engines, as well as crankshafts, axles and gears.

Currently, vanadium redox batteries are generating excitement because they are reusable over semi-infinite cycles, and do not degrade for at least 20 years, allowing energy storage systems the ability to bank renewable energy.

However, these batteries are quite large compared to lithium-ion batteries, and are better suited for industrial or commercial use than for use in electric vehicles. That said, there are a number of companies around the world working on developing the technology for residential and smaller-scale use.

Roskill expects the market for stationary energy storage to increase from less than 2 gigawatt hours in 2017 to 16 gigawatt hours by 2026. The firm notes that vanadium redox batteries currently account for just a fraction of the battery technologies and energy storage market, but even slight growth in market share could potentially add tens of kilotonnes of demand to the market.

Vanadium industry: How to invest

Vanadium bullion is available from private individuals, but the metal is not publicly traded and so most experts do not advise investing in physical vanadium. Instead, many investors interested in the vanadium industry choose to invest in mining companies that are focused on the metal.

Largo Resources (TSX:LGO,OTCQX:LGORF) continues to ramp up vanadium production in South America. The company owns and operates the Maracas Menchen mine in Brazil, and its goal is to reach annual vanadium output of 9,600 tonnes. The mine started producing vanadium in August 2014, and Largo says it is the highest-grade vanadium deposit yet discovered.

Aside from Largo, few other publicly traded companies are currently mining vanadium. However, many companies are exploring for the metal or developing vanadium projects. Below are some examples. All are listed on the TSX, TSXV or ASX and had market caps of over $3.5 million as of August 30, 2019.

  • Australian Vanadium (ASX:AVL) owns several exploration-stage vanadium projects in Western Australia, including its flagship Australian Vanadium project. The company is also developing the Coates vanadium deposit, a historic resource first identified in the 1960s, and it also owns tenements covering the Nowthanna Hill uranium-vanadium project in Australia.
  • Bushveld Minerals (LSE:BMN) has projects in South Africa and is focused on producing vanadium pentoxide for vanadium redox batteries and the energy storage sector. Recently, Bushveld was approved by the Competition Commission of South Africa to acquire Vanchem, a vanadium production facility able to produce oxide, ferrovanadium and vanadium chemicals.  Bushveld will use the Vanchem facility to increase its processing capacity.
  • Energy Fuels (TSX:EFR,NYSEAMERICAN:UUUU) is primarily focused on uranium mining, but has processed vanadium at its White Mesa mill in the US in the past. Over the last year, Energy Fuels has restarted vanadium production and was the first miner to enter vanadium production in the US. During the most recent quarter, the miner produced 485,000 pounds of vanadium and expects to increase production for the remainder of the year.
  • Horizon Minerals (ASX:HRZ) recently changed its name from Intermin and is primarily focused on gold, but does have a joint venture project covering the Richmond vanadium project in Queensland, Australia. The companies are currently looking to secure funding to develop the mineral deposit.
  • Prophecy Development (TSX:PCY,OTCQX:PRPCF) operates two near-term producing vanadium and silver projects, as well as one coal mine that is already in production. The company’s Gibellini vanadium project in Nevada is expected to enter construction in 2021 or 2022. The Nevada-based project is then estimated to be in production for the latter part of 2022.
  • Syrah Resources’ (ASX:SYR,OTC Pink:SYAAF) main asset is the Mozambique-based Balama project. It primarily produces graphite, but the company is increasingly examining the vanadium potential the deposit includes. Syrah is also becoming more involved in the battery metals space, an area that uses both graphite and vanadium, as well lithium.
  • TNG (ASX:TNG) is developing its Mount Peake vanadium-titanium-iron project in Australia’s Northern Territory. According to the company, the JORC indicated resource for the Mount Peake project is one of the largest-known vanadium resources in Australia.
  • Vanadium One Iron (TSXV:VONE) is a diversified explorer operating the Mont Sorcier iron and vanadium project in the province of Quebec. In its most current technical report, the company notes that total indicated resources are calculated to be 113.5 million tonnes in the ground, with reasonable prospects for the eventual extraction of 35 million tonnes of concentrate.
  • VanadiumCorp Resource (TSXV:VRB,OTC Pink:APAFF) is focused on being an integrated technology and mining company developing a supply chain for vanadium redox battery energy storage systems and other potential applications for the versatile metal. Currently the company is developing its Lac Dore project in Quebec.

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