Vanadium — from steel additive to critical battery technology
Here’s another to add to your technology metals list: vanadium. It’s now seen as a “new energy” metal. And, like so many of the critical, technology metals, its supply is concentrated in a few hands — in this case, by South Africa, Russia and China.
The metal is now in the process of being given a new future by a massive game-changer — and the name of that game-changer is Vanadium Redox Batteries (VRBs for short). It’s all about the ability of national power grids to store energy.
Hardman & Co, a London-based brokerage, has just done a detailed analysis of vanadium and its new energy applications. The report was done in respect of an Australian project; a company called TNG Ltd (ASX:TNG) has a vanadium project in the Northern Territory. The company, according to Hardman, is in discussions with trading houses for off-take. Hardman estimates that VRBs alone will require between 12,420 tonnes a year and 46,038 tonnes a year additional supply of vanadium. To put that into context, the U.S. Geological Survey has 2012 world production of vanadium totalling 63,000 tonnes.
Until now, vanadium has been used mainly for high-strength steel alloying. It occurs in more than 60 different minerals (including phosphate rock and titaniferous magnetite). Its steel applications have accounted for 87% per cent of the vanadium consumed. However, customers and regulators are putting pressure on steel makers to increase metal strength and there are tighter regulations for rebar steel. This is expected to add another 15,000 tonnes a year to annual global demand by 2015.
The most exciting potential, though, is for use in batteries — vanadium-lithium batteries for motor vehicles and VRBs that store electricity in large volume.
All but 10% of the vanadium now mined is produced outside the three main vanadium powers. There are high barriers to entry — getting a vanadium mine into operation is very capital-intensive. And Hardman makes this point: “The vanadium supply chain is seen by some observers as semi-functional, based as it is on a creaking South African mining infrastructure, ageing Russian mines and a tariff-happy Asian trade”.
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But the new batteries also are important. While steel makers have options so far as vanadium is concerned (niobium, for example), the energy technologies do not allow the same inter-changeability.
Both Japan and South Korea maintain government-held stocks of vanadium, but few other countries stockpile the metal. Japan’s standard for strategic metals is 42 days’ supply; in South Korea, the aim is have 60 days worth of supply, according to Hardman. The situation in Russia is unclear.
But it is the needs of power grids that is now dominating discussion of vanadium. Grid operators, renewable energy generators and utilities are looking for bulk-energy storage technologies to increase the efficiency and stability of the national grid systems. They want to be able to tap stored energy if peak demand exceeds expectations, or there is a problem — the cut-out of a large wind farm or the shut-down of a nuclear plant, just to give two examples. The grid operators need to avoid voltage sags and spikes, brownouts or even blackouts. As Hardman says, it is a tribute to Britain’s national grid that Londoners no longer have to keep candles in their bottom drawers.
Two, possibly three, VRB systems are currently being built or operated. Sumitomo Electric Industries and Hokkaido Electric Power Co are spending $200 million on a grid-integrated plant with 60 megawatts of storage capacity. Alongside, incidentally, the companies are also building a 20MW peak capacity lithium-ion battery system. In China, Dalian Rongke Power has installed a VRB storage system at a 50MW wind farm at Shenyang. The company is also developing a new industrial park to manufacture up to 4.3 gigawatts annually of VRB capacity at a cost of $400 million. Hardman describes this as “a formidable investment in this emergent technology”.
There is also reported to be a 8MW VRB facility at Zhangbei.
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