Wondering how to invest in the vanadium industry? Learn more about supply and demand, as well as players involved in the space.
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.
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 this exciting industrial metal.
Vanadium industry: Supply and demand
China was the world’s largest producer of vanadium in 2020 by far, contributing 53,000 metric tons (MT) to the vanadium industry. Russia came in at a distant second with an output of 18,000 MT and South Africa in third place with 8,200 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 the large majority 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 predicts that VRBs “could become a major market for vanadium amid growing demand for energy storage, should the technology develop.” Along with a post COVID-19 recovery in demand from the aerospace sector, this could translate into higher demand for premium products such as high-purity vanadium pentoxide (V2O5) or vanadium trioxide (V2O3).
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 gain exposure to the market through vanadium mining companies.
Largo Resources (TSX:LGO,NASDAQ:LGO) owns and operates the Maracas Menchen mine in Brazil, and has an annual vanadium output of between 12,000 and 15,000 tonnes. The company supplies vanadium products for multiple applications and has developed VRB systems for advanced renewable energy storage solutions.
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 $50 million as of May 20, 2021.
- Australian Vanadium (ASX:AVL) owns several exploration-stage vanadium projects in Western Australia, including its flagship Australian Vanadium project.The project has been recognized as a strategically important critical metal and battery metal project by the federal and Western Australian governments.
- Bushveld Minerals (LSE:BMN) says it has one of the world’s largest, high-grade primary vanadium resources. The company’s assets are all in South Africa and include three vanadium properites (Vametco, Brits and Mokopane) and two processing facilities (Vametco and Vanchem).
- Energy Fuels (TSX:EFR,NYSEAMERICAN:UUUU) is primarily focused on uranium mining, but is also the only primary producer of vanadium in North America. The company produces both uranium and vanadium at its White Mesa mill in Utah.
- Horizon Minerals (ASX:HRZ) is primarily focused on gold, but does have a joint venture project covering the Richmond vanadium project in Queensland, Australia. JV partner RVT recently completed a pre-feasibility study on the project based on an initial 20-year mine life at with annual production of 12,700 tonnes V2O5 at 86 percent recovery.
- Silver Elephant Mining Corp. (TSX:ELEF,OTCQX:SILEF) has a diverse mineral portfoiol that includes the Gibellini vanadium project in Nevada. The company announced in May 2021 its intention to spin out its vanadium asset into a subsidiary company, the Nevada Vanadium Mining Corp. Vanadium is designated as a critical mineral in the United States.
- Strategic Resources Inc. (TSXV:SR) has two vanadium assets including its flagship property, the past-producing Mustavaara vanadium-iron-titanium deposit. The company recently released a preliminary economic study for the project outlining a 20-year mine life and production of just under 5kt per year of ferrovanadium and over 300kt of pig iron.
- 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.
- Western Uranium and Vanadium Corp. (CSE:WUC,OCTQX:WSTRF) is a near term producer of uranium and vanadium with six uranium-vanadium properties in western Colorado and eastern Utah.
Did we miss a publicly traded vanadium company that you think should be included in this article? Please let us know in the comments. And don’t forget to follow us @INN_Resource for real-time news updates!
This is an updated version of an article originally published by the Investing News Network in 2014.
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Energy Fuels, Vanadium One Iron and VanadiumCorp Resource are clients of the Investing News Network. This article is not paid-for content.