Summary
- Vanadium is the 20th most abundant element in the earth’s crust and the 13th most available metal, but it is a challenge to recover.
- Heap leaching is a method that has taken low grade deposits (gold, copper, nickel and cobalt) and recovers sufficient metal to be profitable.
- While the roasting projects require a feed grades of 1% or higher for effective vanadium recovery, the heap leach deposits can be profitable at one-third that grade.
- The US does not produce any of its own vanadium as of 2018, and has to import it’s ~10,000 tons of consumption from the top four world producer, China, Russia, South Africa or Brazil.
- The most recent impact to the industry is China curtailing some of its production due to pollution from the mines and processing facilities and China increasing its use of vanadium in its structural steel.
- These factors and the fact that no new facilities have been built recently caused the price increase by more than 500% since 2016 from $2.5 per lb to current $15.5 per lb.
Q4 hedge fund letters, conference, scoops etc
What is vanadium and why should I care? Vanadium is the 20th most abundant element in the earth’s crust and the 13th most available metal. Vanadium is used in structural steels (rebar, etc.), high speed tool steel, catalysts for sulfuric acid production, surgical steels, aircraft structural and engine parts and vanadium flow batteries. Vanadium has been recognized as a strategic metal in 2018 along with 34 other minerals, as the US consumes about 9720 tons per year (2018), which is 13.3% of the world production but produces no vanadium on its own. The majority of the vanadium production comes from production comes mainly from China (54.2%), Russia (24.7%), South Africa (12.5%) and Brazil (8.6%).
The latest deposits discovered in the United States are in Nevada. These deposits are First Vanadium (Carlin), Iron Point (Victory Metals), Bisoni (Cell Cube) and Gibellini (Prophecy Development). These projects are in various stages of development with the Gibellini Project being the most advanced.
The projects will have the potential of producing all of the US Vanadium consumption they are developed and operated over the next 30 to 40 years.
Production from these mines will be used to produce steel for rebuilding US highways and bridges, produce the next generation of fuel efficient aircraft, housing and buildings construction (apartments and business locations), as well as to help store power from wind, solar and wave electrical producing facilities and also be used for emergency power for cities like, New York, Boston, and Chicago.
Vanadium is an abundant metal but it is a challenge to recover. Standard recovery method is to roast the ore with salt (sodium chloride), sulfuric acid and then leach the residue to extract the vanadium into solution where it can then be recovered. Other processes, like Largos in Brazil recover the vanadium by pre-concentration using magnetic separators and then that concentrate is acid roasted, leached and the vanadium recovered.
Heap leaching is a method that has taken low grade deposits (gold, copper, nickel and cobalt) and recovers sufficient metal to be profitable. Some vanadium projects, such as, Gibellini can utilize this technology because their ore has a high acid solubility, which allows economic recovery of the metal.
While the roasting projects require a feed grades of 1% or higher for effective vanadium recovery, the heap leach deposits can be profitable at one-third that grade. The recovery of vanadium from solution usually requires the treatment of the solution using solvent extraction or ion exchange resins. This process pulls the vanadium from solution and concentrates and purifies the vanadium so it can be made into a final form ready to be used in the market. The majority of the vanadium mined is recovered in the oxide form, called V2O5 or vanadium pentoxide. This pentoxide can be recovered as a fused form after the pentoxide is melted or in a chemically pure for (98 to 99% V2O5). The chemically pure form of V2O5 is produced from a lower purity pentoxide and purified by re-dissolution and subsequent precipitation. The high purity form of pentoxide is used for electrolytes, vanadium-aluminum alloys and vanadium-titanium alloys. The lower purity fused pentoxide is used to make ferro-vanadium, which is used for steel manufacturing.
What’s so special about vanadium? It imparts greater strength to steel with the addition of 1% into structural steel. Manganese can also be used for adding strength but the manganese is mostly used for abrasion resistance and the control of carbon in the steel is crucial to keep the material from becoming brittle. Vanadium is not limited by these conditions and the amount of vanadium added is less than manganese.
Vanadium is used as a catalyst in the production of sulfuric acid and in the petrochemical production processes. The vanadium molecular structure makes this element an important part of oxidation reactions. At this time vanadium catalysts are the second highest usage of vanadium with steel production being the highest.
Vanadium-Aluminum and Titanium-Vanadium alloys are the third highest usage of vanadium world production. The titanium alloys are significantly more workable than other titanium alloys while still keeping the required corrosion and heat resistance necessary for the metal’s application. This alloy has been used to substitute for Tantalum and Columbium metal parts.
The future outlet for vanadium is for the Vanadium Flow Redox Batteries (VFRB). These batteries utilize the multiple oxidation states of the vanadium ions in solution to store vast amounts of electricity. These types of batteries have been proposed for usage by Solar Power, Wind Power and Wave Power producers. The value of these batteries are to store power during times of peak production and then release that power during time of low production. This allows the power producers to level their production, which then would gain those producers a higher price for their power as utilities (their customers) prefer to have an even flow of power and pay a premium for that stability of production so they don’t have to bring on high cost power to cover the lull periods.
So we see that vanadium is a very useful metal and that it is a fairly abundant metal when you look at how much is contained in the earth’s crust (13th most abundant metal). So what’s the catch? The catch is that most, vanadium production is quite costly and deposits usually have to contain 1% vanadium to justify project development. The majority of the production must first be crushed, ground, magnetically separate (some ore) or salt roasted (the rest of the ores), then leached and the vanadium recovered. So although the vanadium is abundant in the earth’s crust, deposits with the proper grade are much fewer.
The US does not produce any of its own vanadium as of 2018, and has to import it’s ~10,000 tons of consumption from the top four world producer, China, Russia, South Africa or Brazil. This consumption is subject to the construction needs for (building, factories, roads and bridges), the cycle of catalyst usage (catalysts last for 5 to 8 years), aviation and aerospace equipment production and the development of VFRBs. All of these end usages have been responsible for the fluctuation of the vanadium price in the past. The most recent impact to the industry is China curtailing some of its production due to pollution from the mines and processing facilities and China increasing its use of vanadium in its structural steel. These factors and the fact that no new facilities have been built recently caused the price increase seen in 2018. This along with the rise of use of vanadium alloys in the aviation and aerospace industries (setting up a new off take for vanadium) show that a new paradigm in the industry has arrived and many companies are scrambling to expand production from existing mines or to bring new mines on line (normally a 10 year timeline).
Future articles on the technology side will be about why sulfuric acid is required, how are the various types of ores treated and why the heck we should care about heap leaching.
