Western Australia Implements 2.5 Percent Vanadium Royalty Rate

A royalty rate of 2.5 percent has been applied to all vanadium products in Western Australia as of February 4, 2026.

In a joint announcement by Minister for Mines and Petroleum David Michael and Minister for Energy and Decarbonisation Amber-Jade Sanderson, the government said that the new rate aims to incentivise production of vanadium in WA and encourage its emerging vanadium battery industry.

The proposal to introduce a royalty rate stems from an election commitment made by the Cook Government.

The move also aligns with plans to develop Australia’s first locally built, utility-scale vanadium flow battery, which is slated for installation in Kalgoorlie.

Called the vanadium battery energy storage system (VBESS), the 50-megawatt, 10-hour WA-made vanadium flow battery in Kalgoorlie will be the largest of its kind in Australia.

It is expected to create 150 jobs during construction and targets operational status by 2029.

"Installing a Vanadium Battery Energy Storage System is a major election commitment under our Made in WA plan, to diversify the economy, enable Western Australia to become a renewable energy powerhouse, and to make more things here,” Sanderson commented.

A local vanadium electrolyte production and battery assembly industry in Kalgoorlie is also part of the government’s plan, which it intends to build with the private sector to stimulate opportunities for downstream processing and exports.

The Association of Mining and Exploration Companies (AMEC) welcomed the revised royalty in a statement, saying that this delivers much-needed support for developers and investors at a critical point for the emerging sector.

“With Western Australia hosting some of the world’s most prospective vanadium resources, this important mineral underpins long-duration energy storage and supports broader decarbonisation and grid stability objectives,” added AMEC CEO Warren Pearce.

“Importantly, today’s announcement also maintains a zero royalty rate on vanadium

electrolyte production, reinforcing the opportunity to move beyond raw material extraction and into higher-value adding and battery supply chains, particularly in regional centres such as Kalgoorlie.”

The government said that expressions of interest remain open, inviting local businesses to partake in the project.

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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.