October 24, 2022

Apart from traditional use in steel alloys, vanadium has an important growing application in grid-scale batteries. Queensland has one of the world’s largest known resources for vanadium. Several companies are currently looking into mining of this metal in North West Mineral Province, aiming for a battery-grade vanadium pentoxide (V2O5), with the first production expected as early as in 2024.

Brief market overview

The vanadium market is largely driven by steel consumption, accounting for about 90% of vanadium use, mainly in high strength low alloy steel. Other important applications include titanium alloys, catalysts (e.g. for sulphuric acid production), glass coatings and ceramics. However, the application attracting the most interest from investors is vanadium redox flow batteries (VRFB), with expected growth rate of more than 20% per annum (versus 0-4% growth rates in other sectors) (DISER).

The major benefits of VRFBs, compared to lithium-ion batteries, include longer life cycle, unlimited energy capacity, less sensitivity to higher depth of discharge, and easy reuse and/or recyclability of major components (i.e. vanadium electrolyte) (IEA). The only downside is a lower energy density; this limits the application of these batteries to grid-scale energy storage, albeit the major battery market in Australia and an essential part of the state and national decarbonisation strategy.

About 70% of global supply of vanadium is currently associated with processing of vanadium-rich slags, a by-product or co-product from smelting vanadium-rich iron ores and in some cases from oil refining, mainly in China and Russia. Mining and processing of vanadium as a primary commodity represents about 18% of the market, while recycling is estimated to cover the remaining 12% (DISER).

Ferrovanadium and vanadium pentoxide (V2O5) are two major traded commodities in the vanadium market. Ferrovanadium is an alloy, thus attracting higher price for vanadium content, mainly used by the steel industry. Vanadium pentoxide is used for catalysts, vanadium chemicals and batteries, as well as to produce high vanadium-containing ferrovanadium.

Global production of vanadium was estimated at 110 kt in 2021 (USGS), worth about US$5 billion.

China holds the major known reserves for vanadium (39.3%), and heavily dominates its production (66.4%) and use (56%) (DISER). Australia has a 24.8% share in the world’s reserves but currently does not produce vanadium. Major known mineral occurrences for vanadium in Australia are in Western Australia (in titaniferous magnetite deposits) and Queensland (mainly in oil shale deposits).

Vanadium in Queensland

There is no current production of vanadium in Queensland, however, known vanadium resources are one of the largest in the world. The potential sources for vanadium in Queensland fall into three main groups, as summarised in the table below.

Queensland’s known titaniferous magnetite deposits are relatively small to be justified on the basis of iron ore mining, and currently are not considered for development. Mining of iron oxide-Cu-Au-U-REE deposits will likely require the recovery of uranium, which is currently banned in Queensland. Thus, the only viable, yet most significant, source of vanadium in the State is oil shale deposits.

The vanadium enriched layer(s) in Queensland’s oil shale deposits, depending on geological settings and other factors, can be processed with or without oil recovery. These deposits are also often enriched in alumina, allowing to co-produce high purity alumina – another valuable battery mineral, used in some new types of lithium-ion batteries, e.g. lithium nickel cobalt aluminium oxide (NCA).

There are several projects that are currently advancing toward production of vanadium in Queensland. Most of them aim to produce vanadium pentoxide as the final product, while two companies also consider manufacturing of vanadium electrolyte for batteries.

Major vanadium projects in Queensland

Queensland’s deposits can be also compared against other potential vanadium projects in Australia (see the graph below). Unlike vanadium occurrence in oil shale in Queensland, all other projects in Australia are associated with vanadium titaniferous magnetite (V-Ti-Fe). This means a different processing route, cost structure, and potential by-products list, and thus the deposits may not be fully comparable on the basis of vanadium grade and total resource estimate.

Major vanadium projects in Australia (by metal grade, total resource, and deposit type)

For further information, please contact Artem Golev