Investing

Australian Vanadium

Overview

Vanadium doesn’t get quite as much attention as other critical and battery metals, but it should.

Resistant to breakdown from both acid and salt, it adds considerable strength, heat resistance and toughness to steel when alloyed. Unsurprisingly, these characteristics have made vanadium a critical mineral for defence applications, particularly as vanadium need only be present in small amounts to impart its benefits. For the past twenty years, demand for the metal in the steel sector has steadily increased. With the recent push for clean energy and net-zero emissions, that demand is set to rise, not only from the steel market but from the battery market.

Australian Vanadium Limited (ASX:AVL, FRA:JT71, OTCQB:ATVVF), which holds one of the most advanced high-grade vanadium deposits in the world, has placed significant focus on developing its Australian Vanadium Project, a high-grade vanadium, titanium and iron resource situated roughly 43 kilometres south of the mining town of Meekatharra in Western Australia.

Vanadium’s potential goes well beyond construction steel. The metal is also used extensively in multiple industries, including aerospace, defence and as a chemical catalyst. What’s most notable, however, is vanadium’s status as a battery metal, specifically one suited for long-term, large-scale energy storage.

The vanadium flow battery (VFB) was first invented in 1984 at the University of New South Wales in Australia. Early VFBs had to be the size of approximately one to two basketball courts to adequately perform, but the technology has been refined over the years since. Today’s VFBs are only a third of the size of their colossal predecessors, with a significantly higher energy capacity.

As businesses and governments seek battery storage for large-scale use cases, demand is expected to increase further, with the VFB market accounting for more than 10 percent of all vanadium production by the end of 2023. Demand for vanadium is expected to double by 2032, of which 90 percent will be driven by VFBs.

AVL is also working to cultivate Australia’s burgeoning VFB market through its wholly owned subsidiary VSUN Energy. VSUN Energy’s current projects include the installation of a VFB to power an industrial chlorinator, as a standalone power system for a mine process water pump at a major nickel project, and to power the systems at an orchard in Victoria. VSUN Energy is also consulting with several major mining clients.

The major component of a VFB is vanadium electrolyte. This solution of vanadium mixed with acid and water will be manufactured by AVL at a facility being constructed in the Perth region.

Both VSUN Energy and the electrolyte manufacturing facility are part of AVL’s vertically integrated strategy, through which it intends to support every stage of VFB production. This will give it the ability to not only produce the world’s highest-quality vanadium but also tailor that vanadium to its customers’ needs.

In 2023, AVL and Technology Metals Australia Limited (ASX:TMT) agreed to merge via a proposed scheme of arrangement under which AVL will acquire 100 percent of the TMT shares on issue. The merger has since been completed accelerating the company’s journey to become a global leader in the vanadium supply chain. The transaction consolidated two adjoining projects across one orebody. Work is underway focussing on concentrate quality and coproduct optimisation to unlock reduced capital and operating costs.

Company Highlights

Demand for VFBs is expected to fundamentally restructure the vanadium supply chain, with predicted demand ultimately outstripping global production.Australian Vanadium Limited (AVL) holds one of the world’s most advanced, high-grade vanadium deposits in the world, situated in Western Australia.The company has had a strong technical team in place from the inception of its asset development strategy.The company employs an experienced leadership team with a proven technical and commercial track record in the vanadium sector, as well as project development and operations.AVL maintains strong relationships with Australian government agencies and has been awarded a $49-million grant from the Australian Government towards development of the Australian Vanadium Project.The status of the AVL project positions AVL with early mover advantage and supplier-of-choice status in the global battery market.AVL plans to incorporate green hydrogen into the natural gas supply for its processing plant to help reduce carbon emissions.The company maintains strong community relations, which include community sponsorship across Mullewa and Meekatharra.The strategic location of the company’s processing plant has the potential to provide a hub for processing vanadium concentrates from the region.

Key Project

The Australian Vanadium Project (AVL Project)

Located in Western Australia’s Murchison Province, the Australian Vanadium Project will consist of an open cut mine, crushing, milling and beneficiation south of Meekatharra and a processing plant near the port city of Geraldton.

AVL has appointed engineering group Primero Group to construct its vanadium electrolyte manufacturing facility in Western Australia. The facility is designed to produce up to 33 MWh per year of vanadium flow battery high-purity electrolyte. The Australian Government’s grant of $3.69 million will co-fund the commercial vanadium electrolyte facility development.

Equipment for vanadium electrolyte production

Situated in Perth, the plant leverages proven technology sourced from US Vanadium LLC. Construction of the plant is underway and electrolyte will be available for battery supply in 2024.

As one of the world’s most advanced in-development vanadium projects, the AVL Project has national strategic significance to Australia’s critical mineral supply chains. The project has been recognised by both the Australian federal government and the Western Australian government, receiving multiple grants for a combined total of over $52.69 million.

The AVL deposit consists of a basal massive magnetite zone overlaid by five lower-grade mineralised magnetite-banded gabbro units, each of which is between 5 and 30 metres thick. Vanadium mineralisation can be found in both the massive magnetite horizon and the lower-grade gabbro horizons. The deposit is further divided into kilometre-scale blocks by a series of regional scale faults; the blocks show little sign of internal deformation and strong consistency in layering.

In late April 2023, AVL’s processing plant site rezoning was approved by the city of Greater Geraldton, pushing plant one step closer to commencing construction. Once completed, the plant along with the mine will provide high-purity vanadium oxide and an iron-titanium co-product.

AVL could commence construction of its Australian Vanadium Project in 2024, targeting production by late 2025 or early 2026. Profiled on WA Investments, the project is seeking an investment value of more than $500 million to start building the project including an open-pit mine near Meekatharra and a processing plant near Geraldton.

Project Highlights:

Government-recognised: In recognition of its national significance, the AVL Project was awarded Federal Major Project Status by the Australian government in September 2019. It was also awarded State Lead Agency Status by the Western Australian Government in April 2020.High-grade Magnetite: Australian Vanadium’s initial assessment of the project also indicates the presence of a distinct massive magnetite high-grade zone of 95.6 Mt at 1.07 percent V2O5.Other Minerals: In addition to vanadium, the AVL project also contains estimated cobalt, nickel and copper resources.Broad Focus: Rather than solely targeting the battery market, AVL intends to serve all sectors that require the critical metal. This includes the steel, titanium master-alloy, aerospace and specialty chemicals markets.Sustainable Production: AVL intends to operate its mine ethically and with a low-carbon footprint through the use of solar and wind generation and processing innovation designed to reduce carbon emissions..Longevity and Scalability: Once operational, the mine will have an estimated lifespan of more than 25 years, while the configuration of the processing facility will allow the company to quickly scale production as necessary.

Management Team

Cliff Lawrenson – Non-executive Chair

Cliff Lawrenson has more than 10 years of experience as a non-executive chair and non-executive director in both public and private companies. He is currently non-executive chair of Paladin Energy Ltd (ASX:PDN) and Caspin Resources (ASX:CPN) and non-executive chair of privately owned Pacific Energy Limited and Onsite Rental Group.

Lawrenson was managing director of Atlas Iron Ltd from 2017 and led the company to its acquisition by Hancock Prospecting Pty Ltd. Prior to Atlas Iron, Lawrenson served as managing director of a number of ASX-listed companies in the mining and mining services sectors. Lawrenson was also a senior executive of CMS Energy Corporation in the United States of America and Singapore, preceded by an investment banking career.

Daniel Harris – Technical Director

Daniel Harris is a vanadium industry veteran and has an understanding of the resource sector from both a technical and financial perspective. He is currently non-executive director of US Vanadium LLC, Queensland Energy & Minerals (ASX:QEM) and Flinders Mines (ASX:FMS). He is an advisory board member and vanadium consultant for Blackrock Metals.

Previous roles include interim CEO and managing director at Atlas Iron; chief executive & operating officer at Atlantic; vice-president and head of vanadium assets at Evraz Group; managing director at Vametco Alloys; general manager of vanadium operations at Strategic Minerals Corp and acting as an independent technical and executive consultant to GSA Environmental Limited in the United Kingdom.

Miriam Stanborough AM – Non-executive Director

Miriam Stanborough is a chemical engineer with over 20 years of experience in the mineral processing industry across a range of commodities. She has held senior roles at Monadelphous, Iluka Resources, Alcoa and WMC Resources. Her skill base spans innovation and technology, technical development, production management, project management, business improvement and people and culture.

Stanborough is currently a non-executive director of Pilbara Minerals Limited (ASX:PLS), BCI Minerals Limited (ASX:BCI), chair of the Minerals Research Institute of Western Australia (MRIWA), deputy chair of the Northern Agricultural Catchments Council (NACC), and a director of Scouts WA.

Peter Watson – Non-executive Director

Peter Watson is a chemical engineer with 40 years of experience in senior technical, project and management roles in addition to corporate experience running ASX-listed companies. He has significant board-level experience, particularly regarding safety, governance, financial reporting, risk management and strategy.

Watson is currently a non-executive director of Paladin Energy Ltd (ASX:PDN), New Century Resources (ASX:NCZ) and Strandline Resources Limited (ASX:STA).

Anna Sudlow – Non-executive Director

Anna Sudlow is a corporate finance executive with experience in the mining and resources sectors across a range of commodities and jurisdictions. She holds a Bachelor of Commerce, is a certified practising accountant (CPA) and holds a Master of Business Administration (MBA). Sudlow has held senior roles at Woodside Energy and Paladin Energy and has experience in strategy, capital management and funding, commercial analysis, business development, risk and financial reporting and governance. Sudlow is currently the CFO of Paladin Energy, (ASX:PDN), an Australian-listed uranium company on the S&P/ASX 200 Index.

Graham Arvidson – Chief Executive Officer

Graham Arvidson has 18 years of experience in the minerals sector spanning feasibility, evaluation, successful development and operation of mineral assets globally and across a broad range of commodities including deep experience in vanadium, lithium, nickel and other future-focused battery metals.

Arvidson has proven project development expertise, a deep Western Australian project development network specific to mining, commercial acumen borne of managing contracts from both the client and contractor side and extensive project management experience in tendering, negotiation, conforming and managing O&M, EPC, EPCM, EPC-O and BOO forms of project delivery.

Todd Richardson – Chief Operating Officer

Todd Richardson BSc ChE MBA is an expert in vanadium process design, commissioning and operations with over 20 years’ experience in vanadium. He has an extensive background in operations management and technical services both in the USA and Australia in all phases of plant operation – process design through commissioning, ramp up and operation. Richardson leads the development of AVL’s world-class vanadium project.

Tom Plant – Chief Financial Officer

Tom Plant is a seasoned chartered accountant and finance executive with almost 30 years of experience in various corporate and commercial roles. He has a strong background in debt and equity funding solutions, investment evaluation and corporate transactions. Plant recently served as interim CFO at Leo Lithium, which developed the Goulamina Lithium Project in Mali. Prior to that, he was the CFO at Firefinch and spent 10 years at global mineral sands and rare earths producer Iluka Resources. He held various positions in investment banking and professional services with Macquarie Group, Dresdner Kleinwort Wasserstein and Arthur Andersen.

Neville Bassett – Company Secretary

Neville Bassett is a chartered accountant operating his own corporate consulting business, specializing in the area of corporate, financial and management advisory services. Bassett has been involved with numerous public company listings and capital raisings.

His involvement in the corporate arena has also taken in mergers and acquisitions and includes significant knowledge and exposure to the Australian financial markets.

Bassett has a wealth of experience in matters pertaining to the Corporations Act, ASX listing requirements, corporate taxation and finance. He is a director or company secretary of a number of public and private companies.

Louis Mostert – Chief Legal and Compliance Officer, Joint Company Secretary

Louis Mostert has over 20 years of experience in project contracting and finance, corporate advisory, mergers and acquisitions, insurance management, dispute resolution, work health and safety, employment and industrial relations, intellectual property, corporate governance and compliance.

Mostert graduated from the University of Western Australia with a Bachelor of Engineering (Hons) and a Bachelor of Laws (Hons) and has a Diploma of Applied Corporate Governance from the Governance Institute of Australia. He is admitted as a barrister and solicitor of the Supreme Court of Western Australia, a fellow of the Chartered Institute of Secretaries, a fellow of the Governance Institute of Australia and a member of the Institute of Company Directors.

This post appeared first on investingnews.com

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