Vanadium the ‘metal to watch’ in 2018, says UK analyst as price surge ‘sends investors scrambling’

12th January 2018
Resources Rising Stars

Vanadium is one of the key commodities to watch this year due to its growing use in mass electricity storage devices alongside its existing use as a steel-strengthening agent, with prices predicted to surge over the next few years according to UK-based corporate advisory firm Hallgarten & Co.

According to Hallgarten analyst Christopher Ecclestone, vanadium prices – which hit a peak of US$12.50/lb last year – are set to rise further to US$13.20/lb by the end of 2018, US$15/lb by the end of next year and US$19/lb by the end of 2020.

“Last decade vanadium surfaced as a subject of interest primarily tied to the fortunes of the then-booming steel industry,” he wrote. “Now vanadium is coming back with a vengeance for its potential in mass electricity storage devices, namely the vanadium redox battery, or VRB.”

Ecclestone says the surge in vanadium prices in the last six months has “sent investors (and promoters) scrambling to find primary vanadium mines or projects into which they could sink their teeth.

“However, as the promotorial class are sheep-like they won’t want to be interested (mind you, a good thing), until the price is significantly higher and the air is full of buzz,” Ecclestone said.

“They are so high on lithium they need little else to stimulate their imagination these days.”

One of the key domestic players set to benefit from the renewed interest in vanadium is Perth-based developer TNG (ASX: TNG), which is aiming to secure a funding package for its $853 million Mount Peake vanadium-titanium-iron project this year.

TNG released an updated Feasibility Study and Financial Model late last year which confirmed the “robust business case” for developing the project, with highlights including a 12% reduction in CAPEX, a A$4.7 billion net present value and forecast life-of-mine net cash-flow of A$11.7 billion.

Mount Peake is a world-scale project which, courtesy of TNG’s proprietary TIVAN Process, will also produce three key strategic metals – vanadium pentoxide, titanium dioxide and pig iron – all of which are benefiting from price increases as the global economy continues to strengthen.

Just before Christmas, TNG told the market that its EIS approvals process for the mine site component of the Mount Peake Project was in its final stages, with project approvals, the completion of titanium off-take and progress on project funding likely to be the big ticket items to watch for early in the New Year.

 

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