Vanadium has, for years, been
little more than a curiosity on the horizon, but this looks set
Traditionally, vanadium has been
used as a strengthening agent for steel and titanium alloys but
new end uses are emerging. As Bill Radvak, CEO of American
Vanadium, explained to a recent energy storage conference in
New York - vanadium flow batteries are an exciting new
prospect, with some batteries already in production or
Nobody in the audience
understood that companies were actually selling [vanadium flow
batteries] globally. Everyone knew about them but they were
looked on more as a research project, Radvak told
When they heard what
Gildemeister [American Vanadiums battery partner] has,
and the completeness of their product and their readiness to
move forward, well, we were extremely popular at the
conference, he added.
To cater for this new demand
source, new supplies of vanadium will be needed and, because
the majority of output is already being used in the steel
industry, battery manufacturers will be looking to junior
The mineral form of vanadium -
vanadium pentoxide - is the medium that vanadium companies tend
to use to report the size of their resources, and is the
principal intermediate product from treatment of magnetite
ores, vanadiferous slags and secondary materials. In its
industrial mineral form, it can be used directly in
non-metallurgical applications and in the production of a range
of vanadium chemicals.
Vanadium pentoxide is also the
starting material for production of ferrovanadium and master
alloys, which are its major end-markets accounting for around
95% of current world demand.
Looking to flow batteries
(redox) flow batteries store energy in a liquid electrolyte
that contains vanadium pentoxide and a dilute acid. The
electrolyte is stored in two separate tanks and is pumped
through two sets of piping, which pass closest to each other in
the cell stack.
It is here that chemical energy is
turned into electrical energy as a single electron is passed
through a membrane from the electrolyte of one tank to the
other. The importance of flow batteries is that there is no
chemical change, unlike other types of batteries, only the
movement of an electron. This means that there is no
degradation of the electrolyte as in normal batteries, giving
each battery a much longer life than standard cells. The
electrolyte does eventually lose some its effectiveness but
this can take 20 years or more.
One of the great advantages is that
the tanks containing the electrolyte can be any size, which
gives great flexibility for battery power.
Primarily, this technology is
appropriate for grid storage applications including remote
power network storage, storage in conjunction with intermittent
grid power systems (wind, solar), and load-levelling
applications, Terry Perles, president of industry
consultants TTP Squared told IM.
A question mark has long hung over
whether vanadium flow batteries can be used commercially, but
companies like Gildemeister, a European-based manufacturer, are
already selling them to be used for both grid scale and smaller
neighbourhood and industrial complex scale storage.
China, the largest producer of
vanadium for the metal industries, is also said to be investing
heavily in flow batteries for the future.
Vanadium flow batteries could
capture about 17% of the grid storage market by 2017 which
would represent about $5.4bn in potential revenue, a report by
Lux Research pointed out. This figure assumes that
developers can reach a target of $750/KWh for a fully installed
system by 2017, analyst Brian Warshay told Vanadium
Investing News. Currently, the price is about
Vanadium produced in 2012 has been
estimated by TTP Squared as 70,000 tonnes with demand estimated
at 81,000 tonnes. The vast majority (92%) of vanadium demand
was from the steel industry.
Demand from flow batteries made up
just 1% of total vanadium demand in 2012 but the demand picture
for the future could be very different: There are
projections from other sources that suggest demand for vanadium
in energy storage applications could grow from about 850 tonnes
vanadium in 2012 to as much as 20,000 tonnes vanadium by
2015, Perles told IM, but stressed that
predicting this was very difficult because of a number of
technologies competing with flow batteries.
Certainly there is a
significant probability that considerable amount of vanadium
will be used in these technologies in the future, but the
impact is very difficult to quantify, he said.
John Hykawy of Byron Capital
Markets agrees, telling IM that battery
applications are potentially a important end market for
vanadium, but that: Time marches on, and technology is
getting away from vanadium for these uses. We had thought, a
few years ago, that vanadium reduction/oxidation batteries
could be a large market. Now, other battery types are
developing, including Sadoways liquid metal batteries for
grid storage (work done at MIT), and the reliability and cost
of lithium batteries is decreasing to the point where vanadium
redox has a much more difficult fight ahead of it.
More than just large batteries
While flow batteries are a major
potential end-market for vanadium, they are not the only
market. Vanadium is being used as a cathode material in lithium
vanadium phosphate batteries.
Lithium vanadium phosphate
batteries are suitable for portable energy storage applications
including automobiles and portable electronic
applications, Perles told IM.
The current generation of
lithium batteries are hampered by low energy storage capacity
and long recharge times. These limitations severely hamper
their performance in automotive applications. Recent
breakthroughs in the use of vanadium in the cathodes of these
systems have overcome these limitations, and batteries which
can store enough energy to drive a car more than 300km and
recharge in 20 minutes have been developed, he added.
Vanadium is also used in a variety
of chemical applications including oxidation and pollution
control catalysts, as well as ceramic colorants, dye fixants
and special glass applications. High purity vanadium oxides or
other vanadium chemicals are most typically used.
Global demand is roughly
2,500tpa vanadium (...) which represents about 3% of global
demand, Perles told IM, adding:
For the most part these applications are fairly mature
and growth in demand is similar to growth in global
The problem with prices
Pricing for ferrovanadium has
spiked drastically on two previous occasions and this could
discourage battery producers from investing, Radvak explained
to IM: The cost of the vanadium
electrolyte is 40 to 50% of the cost of the battery (...) so
when its half of your battery cost, you lose your shirt
when the price spikes.
partnership with Gildemeister allows for this: We would
offer up a long term stable price on the electrolyte so they
can plan the business, said Radvak.
Hykawy agreed that price is a
concern: The irony is that if vanadium redox batteries,
or lithium vanadium phosphate cathodes in conventional lithium
batteries ever take off, it is possible that enough additional
demand is generated to effectively price vanadium out of these
However, he added, current
ferrovanadium prices arent showing signs of moving back
to all-time highs. In fact, over the last decade one could make
a good argument the prices are trending lower.
Vanadium batteries may be here and
may work but on a commercial scale they are yet to reach their
full potential in the market. As such, it is important for
junior producers to retain their focus on current major
end-markets - namely steel.
If a company developing a
vanadium project cant make it work by selling their
products to the steel industry, they probably cant make
it work, because the only customers in town, effectively, are
from the steel industry, Hykawy pointed out.
Radvak agrees, telling
IM: Well have to sell to [the
steel industry] in the earlier years as the electrolyte
business grows. Our calculations are that 11m lb (4,989 tonnes
- American Vanadiums estimated output) is about 700 MW of
storage per year - thats a fair amount. In the long run
its not, but in the early days its quite a bit to
scale up to.
This isnt the only market for
vanadium in the US either, he added, as the US imports roughly
6m lb (2,722 tonnes) vanadium just for the higher price
titanium alloys market - primarily for aircraft.
The question of which junior miners
will step up and supply the budding vanadium pentoxide industry
is on everyones lips, American Vanadium is one of the
larger potential producers, which has great potential because
it is a US-based source.
American Vanadium is developing the
Gibellini project in Nevada which has an estimated output of
11m lb (4,989 tonnes) and should be coming online, subject to
permitting, within three years, Radvak told
The product will be processed on
site and will focus on North America distribution because it
will most likely be the sole domestic source: We have the
only local supply, at least for the next 10 years. We
dont see another scale deposit even on the horizon,
The Nevada deposit is also much
cleaner than some vanadium deposits, Radvak explained:
What makes it unique globally is that most vanadium comes
from magnetite, so its a pretty intensive and dirty rock.
We have a very clean rock with few contained metals and that
gives us the ability to produce whatever refined product we
But although it intends to sell
initially into the traditional vanadium markets of steel and
chemicals, American Vanadium has a very strong focus on the
flow battery business.
We want to be more than just
a vanadium supplier, said Radvak.
Vanadium electrolyte is priced
higher than vanadium for the steel industry and can mean better
profit margins but to capture that market there has to be a
market to capture.
What we saw was Europe, Japan
and China, were almost decades ahead on research compared to
North America, Radvak told IM, which
meant that in order to profit from the market we would
have to help create the vanadium market in North
To do this, American Vanadium
partnered with European-based flow battery producer
Gildemeister which is been selling batteries commercially in
Europe. American Vanadium will handle to marketing and sales of
batteries in North America while Gildemeister will handle
production. The eventual goal is a production facility in North
America but that will be further down the line.
The batteries will be aimed at the
mass storage market in the 0.5MW to 5MW range.
American Vanadium has already seen
interest both from larger scale grid storage customers and from
smaller scale customers which will use the batteries to store
energy generated by renewable sources (chiefly wind and
Batteries that store energy
generated by renewable sources can also be used to take entire
communities off the grid as the batteries mean that
intermittent generation of energy by renewable sources does not
mean an intermittent supply of electricity. Several smaller
communities are investing in this approach and, in the Middle
East, Abu Dhabi is developing the city of Masdar which will run
entirely on renewable sources.
This could also be used to help
more isolated Canadian communities, Radvak explained, which
still rely on diesel generators because of their remote
location. The numbers show, that if you have battery
backup you still need diesel but you can cut 40% of your diesel
costs - thats millions every year, he said.
Atlantic Ltd begins
A project that has recently made it
into production is the Atlantic Ltds Windimurra project,
Western Australia, which has been restarted from a previously
Windimurra first started production
of vanadium in 1999 but was shut down, and the mill scrapped,
in 2003 due to poor market conditions. The mill as now been
rebuilt and production commenced in 2012.
The operation is now ramping up to
its full production capacity of 6,300 tpa, which it expects to
reach by the end of June 2013, and will continue at this rate
over a mine life of more than 28 years.
Windimurra production is
expected to meet about 7% of world demand, Atlantic Ltd
has pointed out, and it is expected global demand growth
will require the equivalent of a new Windimurra to
come on stream almost every year.
Largo Resources to follow
Another major project scheduled to
come online in 2013 is Largo Resources Maracas project in
Construction of the project
commenced in June 2012 and commissioning of the mine is
targeted for Q4 2013. Largo already has an offtake agreement in
place for with Glencore International for 100% of material over
On average, the mine will produce
11,400 tpa of vanadium equivalent over a 29-year mine life from
a reserve of 13.1m tonnes grading 1.34% vanadium pentoxide. The
company also has a measured and indicated resource of 24.6m
tonnes grading 1.11% vanadium pentoxide, and an inferred
resource of 30.4m tonnes grading 0.83% vanadium pentoxide.
The company recently received a
report to re-scope the project by incorporating a new
production stream of both vanadium pentoxide and ferrovanadium
as opposed to only ferrovanadium, which was originally intended
as the sole product.
The report pointed out that results
from metallurgical testing indicate that it is more economical
to produce vanadium pentoxide for life of the project and
convert 65% of it to ferrovanadium from year five onward.
Further down the
Economically viable deposits of
vanadium are often found as co-deposits with other minerals,
several of the producers aiming to come online in the next few
years will produce vanadium pentoxide as a co-product.
One such producer is Energizer
Resources which is developing the Green Giant project in
Madagascar, which includes a graphite deposit as well as the
Similarly, companies such as Argex
Titanium and TNG Ltd are looking to produce titanium dioxide
and vanadium pentoxide from their projects. For projects such
as these, vanadium could prove to be a solid revenue stream in
addition to the main product.
Other companies, however, have put
their vanadium projects on the backburner in order to focus on
other deposits. Speewah Metals began exploring a large titanium
dioxide and vanadium project in Western Australia but has since
shifted its focus to copper and gold: Speewah continues
to monitor the market conditions and the potential of joint
venture and/or any other transactions related to its titanium
and vanadium project, the company said.
Much of the demand for vanadium
pentoxide remains hypothetical but it is clear that there are
several interesting projects looking to cater specifically to
Although, many of these projects
could easily supply the steel industry instead, potential
producers would prefer the mineral end-markets because of the
extra profit margins.
Much still hinges on the success of flow batteries but, as
Hykawy pointed out, the time frame is unknown. I suspect,
though, that we will know by 2015-2016 whether the vanadium
redox battery for grid energy storage has any legs at