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The nation of China now requires almost 50 percent of the global supply of vanadium. The country’s demand grew by 13 percent between 2003 and 2009, while world production of vanadium increased by 7 percent between 2003 and 2008.
By Ethan Ribalkin—Exclusive to Vanadium Investing News
In a country where cities have been leveled by earthquakes in recent years, it comes as no surprise that China continues to increase its demand for high grade steel, and in turn vanadium, which is added to increase the strength of steel. The stronger the structure of the building, the less likely Mother Nature will topple towers.
The nation of China now requires almost 50 percent of the global supply of vanadium. The country’s demand grew by 13 percent between 2003 and 2009, while world production of vanadium increased by 7 percent between 2003 and 2008, according to steelguru.com.
As recently as June 12, 2010 the world’s experts in steel met in Beijing to discuss how the alloy of vanadium can be added to steel to decrease the chances of future earthquake-related casualties.
The event, which was co-sponsored by Vanitec, a vanadium research firm, allowed for a two-day seminar between Chinese regulatory bodies, steelmakers and contractors.
“Due to its rapid economic expansion in the past few years, China has become a leader in steel consumption and production,” said Vanitec CEO David Milbourn, in a press release. “As a consortium of vanadium researchers and manufacturers, we believe Vanitec will play a major role in educating this new market on the earthquake-related benefits of vanadium-enhanced steel.”
With growing importance on producing high strength steels strengthened by vanadium, China is in the market to buy, but fears of an economic downturn in the price of the ore, has investors guarding their pocketbooks.
Last month, Atlantic Ltd acquired the Windimurra vanadium mine in Western Australia.
With a whopping $55.5 million Australian in capital raising for the site, almost half of what was required to revamp the entire project, its joint-venture partner, Mineral Resources Ltd (ASX:MIN), jumped ship. The reason – the company feared the “historically volatile vanadium market,” according to the Sydney Morning Herald newspaper.
While some companies are pulling out of vanadium investments, others are quick to take their place.
Energy Fuels (TSX:EFR) is a uranium and vanadium mineral development company that actively rehabilitates and re-develops former mines. They currently have acquired over 38,000 acres of “highly prospective uranium and vanadium property” throughout the United States and areas of Canada, according to marketwatch.com.
While the challenge of vanadium comes the high cost of producing the ore, one company claims to have found an alternative.
Rocky Mountain Resources (TSXV:RKY) has found a economical advantage over its competitors, according to proactiveinvestors.com. Unlike most vanadium found in iron ore, the company has discovered the alloy in sedimentary shale deposit at the surface. The result – the vanadium is much cheaper to process.
With the strengthening power of vanadium added in steel and China’s apparent interest in improving their cities ability to withstand earthquakes, the future may overcome the ore’s history for being a potentially risky investment.