A Brief Overview Of Vanadium Production
Writen By: Richard Mowat
To understand the position of companies in the global vanadium market and the importance of vanadium demand in the energy, electronics and defense sectors, it is necessary to understand what vanadium is and why there simply isn’t a sufficient supply. Vanadium is a metal and is the seventeenth most common element in the earth’s crust. It is present in concentrations rivaling zinc and nickel, which are considered abundant, and occurs as a component of at least 55 minerals. Unlike zinc or nickel, vanadium is never found as a pure metal or pure oxide. It does occur in many mineral forms, but it is only present in small concentrations within these minerals. Only a few minerals are commercially significant to the vanadium market. Carnatite, which is a potassium uranium vanadate mineral, is an important source of U.S. uranium oxide production.
Magnetite, which is an iron (II) iron (III) oxide, is commercially important in iron and steel production. These minerals never contain high concentrations of vanadium. Commercial extractions of vanadium have been considered economically feasible only when the market price of the primary product, such as iron or uranium, supports additional extraction operations to meet vanadium demand. That viewpoint is changing, however, as the demand for vanadium increases. For example, UMETCO Minerals Corporation mines carnatite for uranium production and produces vanadium as a co-product. The extraction of vanadium in this process is subsidized by the market price of the uranium oxide. Prior to 1985, more than 50 percent of U.S. vanadium production was tied to uranium oxide production from carnatite ores mined from the Colorado Plateau. Uranium oxide values fell dramatically in the wake of the Three Mile Island incident, and they pulled vanadium production down with them. By the early 1990s, the market price had dropped by 75 percent.
Vanadium extraction became unprofitable and co-production nearly ceased. Like carnatite, titaniferrous magnetite ores also contain only small amounts of vanadium. Due to the large quantities of magnetite used in integrated ironworks and steelworks, magnetite is the largest commercial source of vanadium. Magnetite is processed into pig iron, which is subsequently processed into steel with the formation of a vanadium-rich intermediate slag byproduct. Vanadium is also recovered from other large industrial processes. Monsanto produces a significant amount of ferrophosphorus slag byproduct from phosphorus and phosphoric acid production. Vanadium can be produced directly from small vanadiferous clay deposits found in Arkansas, but the largest American vanadium reserves are the Idaho phosphate deposits. Vanadium and nickel are present as contaminants in most sources of crude petroleum. The vanadium content of some petroleum fuels is a known source of early corrosion in oil-fired boilers. Fly-ash derivatives and petroleum combustion residues have become important post-1990 sources of U.S. vanadium production, as have the spent oxidation catalysts from sulfuric acid production.
The Importance Of Vanadium
Vanadium is much more than just another metal. It is used extensively in the steel industry, has a growing role in the alternative fuel market, is essential as a catalyst for the production of important industrial chemicals, and is a critical component military aerospace technology. The largest vanadium demand comes from the steel industry. Ferrovanadium is an additive to steel that improves the grain refinement of the metal, allows the steel to attain significantly increased hardness values, and dramatically improves the strength of the steel. The usefulness of ferrovanadium was discovered in the early 20th century. Vanadium steel was used extensively in the production of Ford Model T automobile frames, and Ford advertised it as “the strongest, toughest and most enduring steel ever manufactured.” vanadium demand to meet the needs of the steel industry has been increasing ever since. Vanadium steel is used for axles, gears, crankshafts, frames, and many other critical components that will be subjected to high stress. The increase in steel strength is due to the formation of stable vanadium carbides and vanadium nitrides within the steel.
Metallurgical use accounted for approximately 97 percent of domestic vanadium demand in 2009. Vanadium steel alloys are produced as vanadium high-carbon steel, which contains less than 0.25 percent vanadium, and vanadium high-speed tool steel that contains between one and five percent vanadium. Vanadium also improves the strength and temperature characteristics of titanium alloys. It is a critical additive to the aluminum titanium alloy used to produce jet engines and jet aircraft frames. A typical titanium alloy used in aerospace applications contains roughly six percent aluminum and four percent vanadium. Because vanadium forms stable alloys with both iron and titanium, vanadium foil is used as a bonding agent when cladding titanium skins to steel products. Vanadium is also used inside nuclear fusion reactors. It has a moderate thermal neutron-capture cross-section, and the vanadium isotopes produced by neutron-capture have a short half-life. Nuclear energy equipment accounts for a small but critical vanadium demand.
Approximately 85 percent of the vanadium market focuses on ferrovanadium steel or titanium additive. Vanadium pentoxide, which is also called vanadium oxide, accounts for a much smaller percentage of overall vanadium consumption but is also an important industrial and technological compound. It is used as a mordant to fix dyes to fabrics, in printing inks, and as a catalyst in the production of maleic anhydride, which is essential to the manufacturing of polyester and alkyd resins, and in the oxidative production of sulfuric acid. Lithium vanadium pentoxide anodes are used with lithium cobalt oxide cathodes in the production of high energy density vanadium pentoxide batteries. These batteries are important in the development of wind farm energy production and storage facilities. Vanadium pentoxide is also critical in the production of vanadium dioxide ceramics. Vanadium-doped bismuth ceramics exhibit unique ferroelectric and piezoelectric properties that make them useful in solid-state electronic applications. Superconductive magnets are produced with vanadium-gallium mixtures. vanadium stocks have increased in value as product demand in technology applications has continued to increase.
Sources Of Vanadium
South Africa, China and Russia currently dominate the world vanadium market. All produce vanadium primarily as a recovery product from the processing of titanium-rich magnetite ore into pig iron and pig iron into steel. The slag intermediate has high vanadium oxide content and can be processed into ferrovanadium or vanadium pentoxide. The United States imported 1,080 metric tons of ferrovanadium in 2010. The Republic of Korea supplied 38 percent of those imports; the Czech Republic provided 30 percent, and 20 percent came from Canada. In that same time period, the U.S. imported 2,500 metric tons of vanadium pentoxide. The Republic of South Africa, which holds the world’s largest known exploitable reserves of vanadium in the titanomagnetite seams of the Bushveld Complex, provided 39 percent of those imports from 2006 to 2009. Russia provided 32 percent of imported vanadium oxide, and China supplied 28 percent. There is growing concern that China may declare vanadium a strategic element and severely limit export activities. The United States relies heavily on imported sources of vanadium, but domestic production of this important metal has been increasing. In 2006 and 2007, 100 percent of the vanadium consumed in the U.S. as vanadium pentoxide or ferrovanadium was from foreign sources. That percentage dropped to 81 percent in 2009, and in 2010 the net important reliance was only 69 percent of apparent consumption.
Vanadium Global Demand
Heightened global vanadium demand is pushing the steel industry to seek new vanadium sources. China and Japan have recently imposed more stringent construction codes that will require the use of stronger rebar, and producing stronger rebar requires the use of vanadium. The use of vanadium pentoxide batteries for mass storage of energy from renewable sources is predicted to rise sharply in the coming years, and vanadium already plays a critical role in aerospace and military technology. All of these factors will place increasing vanadium market demand on an already limited supply. The global economic downturn in 2009 reduced demand for vanadium, but the market demand has recovered and is once again on the rise. U.S. imports of ferrovanadium increased from 253 metric tons in 2009 to 1,080 metric tons in 2010 and will increase further as the economy strengthens and the demand for high-tech steel rises. In 2010, vanadium market prices were 45 to 50 percent higher than prices during the same months in 2009. Current 10-year market forecasts conducted by CPM Group indicate that strong demand for vanadium products will keep market prices at some of the highest prices observed over the past decade.
Investing In Vanadium
The United States currently has no mining operations which primarily produce vanadium. That is set to change in 2012 when American Vanadium, formerly known as Rocky Mountain Resources, begins producing vanadium from the Gibellini Mine in Nevada. The company plans to meet five percent of global vanadium demand and will operate the mine solely for the production of vanadium. Investors have historically had difficulty investing in vanadium stocks. It has always been considered a minor metal produced as a small component of much larger business operations. investing in vanadium stocks through publicly traded companies inherently involves investing in the company’s primary products – usually iron, steel or uranium oxide. Pure plays investing in vanadium are difficult to find. Ten North American companies are currently involved in vanadium mining and processing. All are Canadian. They are:
- American Vanadium Corp. (TSX-V:AVC)
American Vanadium Corp. (formerly Rocky Mountain Resources Corp.) focuses on environmentally responsible mineral exploration and development in politically stable countries. The company is currently developing the Gibellini Project in Nevada.
- Crosshair Exploration & Mining Corp. (TSX:CXX) Crosshair primarily develops uranium in the U.S. and Canada. vanadium oxide is often co-produced with uranium oxide.
- Expedition Mining, Inc. (TSX-V:EXU)
- Energy Fuels, Inc. (TSX:EFR)
Expedition primarily develops gold sources in the United States. Gold mining often produces materials for the vanadium market as well.
Energy Fuels primarily develops uranium in Colorado, Utah and Arizona. vanadium oxide is often co-produced with uranium oxide. Investment with this company would be investing in vanadium stocks.
- Apella Resources Inc. (TSX-V:APA)
Apella Resources Inc. (Apella) is engaged in the acquisition and exploration of mineral properties in Canada. The Company is an exploration firm focused on prime grassroots vanadium exploration projects in North America.
- Denison Mines Corp. (TSX:DML)
- Adriana Resources Inc. (TSX-V:ADI)
- Largo Resources, Ltd. (TSX-V:LGO)
- Silver Spruce Resources, Inc. (TSX-V:SSE)
- Stina Resources, Ltd. (TSX-V:SQA)
- Continental Precious Minerals Inc. (TSX:CZQ)
Denison operates three U.S. uranium mines. vanadium oxide is often co-produced with uranium oxide. Investment with this company would be investing in vanadium stocks.
Adriana is a Canadian company that primarily operates iron mines in Brazil but is currently developing iron ore projects in Canada. Iron mining often produces materials for the vanadium market as well. Investment with this company would be investing in vanadium stocks.
Largo focuses on exploring and acquiring undervalued mining assets throughout North and South America. The Maracas Platinum-Vanadium mines in Brazil are in advanced stages of development. Investment in Largo Resources is definitely investing in vanadium stocks.
Silver Springs focuses on uranium developments in Canada. vanadium oxide is often co-produced with uranium oxide. Investment with this company would be investing in vanadium stocks.
Stina develops mineral properties in North America.
Continental is a Canadian company that owns and operates uranium properties in Sweden. vanadium oxide is often co-produced with uranium oxide. Investment with this company would be investing in vanadium stocks.
Investment opportunities are available now, and smart investors know how to keep ahead of the technological curve. The demand for vanadium in critical aerospace alloys and solid-state electronics, coupled with decreasing supply from Chinese sources, make vanadium stocks a smart buy now.
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