EDITOR: | February 24th, 2014 | 8 Comments

Vanadium — from steel additive to critical battery technology

| February 24, 2014 | 8 Comments
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VanadiumHere’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”.

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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Comments

  • Fred Cowans

    Robin,
    Thank you for passing this report along to us readers. My understanding is that China is home to the largest known vanadium deposits and is still a net importer. The Chinese also appear to have environmental concerns for the processing technologies that have been used traditionally (roasting) and are supportive of companies that can extract and process economically without polluting.
    Of course, the battery technology is the next leg of the pollution reduction story; VRB with the ability to simultaneously charge and discharge has advantages at the utility grade over other technologies in marrying solar and wind resources to grids.
    With some vanadium operations shut down by the Chinese governments (provincially), some operators with clean technologies are looking for funding to move forward.

    February 24, 2014 - 10:44 AM

  • Dennis

    Robin,

    It there a reason you did not mention the Maracas Vanadium mine in Brazil owned by Largo Resources? They expect to have the mine in operation this quarter and claim it is one one of the richest vanadium deposits in the world. The hope to produce over 11,000 ton per year. The have a offtake agreement with Glencore International.

    February 24, 2014 - 11:20 AM

    • Robin Bromby

      The reason is that I was talking generally about the technology not listing all the projects (there are others).

      But thanks for drawing our attention to this; it is impossible to keep across every mining project in the world (hard as we try) so it is always useful to have readers plugging the gaps.

      February 24, 2014 - 3:03 PM

  • hackenzac

    How much and what kind of graphite do these Vanadium batteries require in comparison to Lithium-ion batteries?

    February 24, 2014 - 2:45 PM

  • Flow

    American Vanadium is just moving from a vanadium developer to an integrated technology company. They got the US master sales agent for the Cellcube, a vanadium redox flow battery from the German company Gildmeister. Worth a look!

    February 24, 2014 - 4:34 PM

    • Robin Bromby

      Thanks. Yes, it certainly sounds like we look into both this and the company Dennis mentioned in an earlier comment.

      Any more vanadium leads, anyone?

      February 24, 2014 - 6:03 PM

      • Fred Cowans

        Sure, the 90% subsidiary of Sparton Resources Inc. (TSX.V: SRI) called VanSpar holds a Chinese patent on its vanadium processing technology. As a result of this technology, VanSpar holds an option on two vanadium assets in Jiangxi Province, China.
        The company on funding could be in production and cash flowing in less than 24 months with relatively little Capex and low Opex. The longer term potential is to partner with a vanadium redox battery maker and to then do and RTO or IPO once of institutional grade and size.
        Yes, totally self serving as I am the banker.

        February 25, 2014 - 4:05 PM

  • Robin Bromby

    That should be “sounds like we SHOULD look into …”

    But welcome to any other vanadium suggestions.

    February 24, 2014 - 6:04 PM

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