Currently produced primarily as a by-product, demand for the element is set to continue to strengthen as its greater use in standard applications – such as strengthening steel – is potentially compounded by its use in vanadium redox flow batteries (VRFB).
Take-up of this style of battery technology to store energy is a key input in CSA’s assessment of a circa-40,000t deficit in about 10 years from now.
CSA assumes 25% of energy storage for renewables uses VRFB, which based on the firm’s assessment of the technical and financial merits of the technology doesn’t look aggressive. It also assumes most projects in the development pipeline come to fruition as well as restarts of previously closed operations.
To put the 40,000t deficit in some perspective, total production of vanadium last year totalled 83,181t.
That was down over 5,000t on the nearly 89,000t produced in 2014.
Falls in output over that period were mainly attributable to lower stone (aka thermal) coal production in China where vanadium is produced as a by-product – with the lower coal production a function of environmental concerns.
Meanwhile, demand in China also looks set to increase strongly with much higher use of the element in rebar (steel) to continue to be enforced in the wake of the 2008 Szechuan earthquake that killed nearly 70,000 people.
CSA’s Donaghy also pointed to there being significant “room to grow” in Asian steel markets based on the amount of the element used in steel in Western markets.
On the supply front, a danger for vanadium bulls is potentially the exploitation of shale-hosted vanadium deposits.
According to CSA, there are significant resources of such deposits and while there is not yet a commercial scale process technology in play, “a number of companies (are in the) technology development phase”
SOURCE: MINING JOURNAL
DATE: NOVEMBER 14, 2018
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