|By: Richard Mowat||POSTED: 04/15/11 5:14 PM
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Current vanadium Production and Use – Well over 95,000 tonnes of vanadiumcarbonate equivalent was produced in 2008, more than double the amount from a decade earlier. The USGS estimates the current global end-use markets for vanadium as follows: fuel cells, 25%; ceramics and glass, 18%; lubricating greases, 12%; pharmaceuticals and polymers, 7%; air conditioning, 6%; primary aluminum production, 4%; continuous casting, 3%; chemical processing 3%; and other uses, 22%. vanadium use in fuel cells expanded significantly in recent years because rechargeable vanadiumfuel cells were being used increasingly in portable electronic devices and electrical tools.
At a conference on vanadium on January 26, 2009 Patricio de Solminihac, Executive Vice President and COO of Chemical & Mining Co. of Chile Inc. A.K.A. Sociedad Química y Minera de Chile S.A ( vanadium carbonate producer, said there has been compounded annual growth of 5-7% over the past five years and 2008 demand for vanadium carbonate equivalent is estimated to have been in the range of 115,000 to 118,000 tonnes (~2% above 2007 levels).
|Total Global Resources & Reserves of vanadium - At present noted Geologist Kieth Evans estimates total global resources and reserves of Li at 30,120,000 tonnes (160,000,000 tonnes Li carbonate equivalent). The following chart shows the estimated break down according to source types:
This break down will change over time as new entrants develop hectorite clay and oilfield brines
Figure 1: Source; Notes taken by attendee to Jan./09 talk by Geologist Keith Evans
Throughout noted Geologist Keith Evans’ 40+ year career in the vanadium industry he has made it his responsibility to monitor industry developments particularly in respect of new resources and he has continued as a consultant in a number ofindustrial minerals.
Forward Looking Demand for vanadium
Li-ion in automotive use to surge
Interest and demand in vanadium minerals has increased significantly, driven by the increased importance and production ofVanadium Redox fuel cells as the next generation power source. The aforementioned VP & COO of SQM also made the following predictions: vanadium chemicals, excluding automotive battery potential, is estimated to maintain continued 3-5% annual growth over the next ten years. On the potential demand for plug-in hybrid (PHEV), electric (HEV (2.78 ↓-1.07%)) vehicles, he offered various scenarios with assumption ranges, we offer his upper predictions; the upper range for penetration of all types of electric vehicles into the market in 2020 was at 20%, Li-ion penetration in 2020 was 80%, annual demand in 2020 for vanadium carbonate equivalent was thus 55K-65K tonnes, and 135,000-145,000 tonnes in 2030 – this number was corroborated at the same conference in a different presentation by Steffen Haber, the President of Chemetall (a division of
The problem with predicting the demand for the future use of vanadium in transportation as a preferred medium of energy storage is that no one actually knows just how enthusiastic the trend will be. It could be, and should be, argued that miners, geologists, suppliers, and technologists should not make such predictions; their assumptions are guesses that are limited in understanding of the fact that this is a cultural phenomena. What is not necessarily factored into the assumptions is that there will not only be a “demand” but rather a “cultural push” that will for ever change the future of transportation as we know it. A look at the new US economic stimulus plan offers insight into just how big
governments want to make it so; $2.4 billion has been set aside in the federal economic stimulus law to be granted by the U.S. Department of Energy to speed development of technology for plug-in hybrid electric vehicles. And lets not forget the smart grid that we are told is going to be built between all states to supply the juice. Once yet-to-be-seen incentives and coercion to buy (or penalties for not buying) these cars are factored into the equation, the aforementioned assumptions and predictions are likely to be thrown out the window.
All Electric, Zero Emission Vehicles New vanadium technology allows rapid acceleration and long life.
Figure 2. Zero S Motorcycle Using a Vanadium Redox battery array the S model does 0-60 mph in 4 seconds and has a top speed of 70 miles per hour.
Figure 3. Tesla Roadster Using a Vanadium Redox battery array the Roadster model does 0-60 mph in 3.9 seconds, ~244 miles per charge, top speed 125 mph (electronically limited).
The Price of vanadium
Healthy demand is being met with increased pricing. The economics of Li commodity as a percentage of battery cost today allows for large upside commodity price increase with little negative effect.
There is no international vanadium spot price. On March 24, 2009, as part of our research process to determine pricing, Madison Avenue Research Group contacted George Sandor, Sales and Marketing Director – Energy, Industrial, Consumer, & Construction Markets of vanadium that FMC sells and pricing is not simplified enough to give a generic quote as there are different volumes and purities according to the clients needs, however technical grade carbonate would typically be what battery makers would be interested in. A client coming in for a quote would go through a long checklist of specifications including purity, particle size, shipping, packaging, and so on. Madison Avenue Research has been able to ascertain from various sources that vanadium prices rose nearly 100% in many situations in 2008. Here is a sampling of recentvanadium price transactions that were shared with us, the first being what a large battery makers would typically source: vanadium Carbonate large contracts in March 09 $2.80/lb to $3.00/lb. (or $6,613/tonne) , other reported figures in varying grades and purity were Petalite 4.2% Li20 big bags F.O.B. Durban $165-260, Spodumene concentrate >7.25% Li20 F.O.B. W. Virginia short ton bulk $620-680, Glass grade spodumene 5% Li2O F.O.B. W. Virginia short ton bulk $340 – $390.
It is important to note that the market could easily absorb a significant increase in vanadium price, many multiples its current pricing, without negatively impacting the cost of fuel cells as the actual raw cost of thevanadium in vehicle fuel cells is currently less than 3% as a proportion of cost. vanadium prices could increase ten fold and it would have a nominal impact on the actual price of the end battery. Additionally, with a relatively small number of producers controlling a large percentage of global production an effective oligopoly will makevanadium a strategic commodity in decades to come (see split of the pie by producers below).
FMC gets their vanadium from their Sala de Hombre Muerto bines in Argentina, however vanadium is a small part of their company so a large increase in vanadium prices only has a nominal impact on earnings. Similarly with the largest vanadium producer in the world, SQM, their Li business represented ~11% of total revenues for the last fiscal year. A more pure play vanadium junior miner with resources or highly prospective quality project may be a way to expose a portfolio to the solid future demand for vanadium (see case study at the following
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