Ferro-Alloy Resources (LON:FAR), a company advancing one of the world’s largest undeveloped vanadium deposits, has taken a significant step forward in the development of its flagship Balasausqandiq Project in Kazakhstan. According to a new research note from Panmure Liberum, FAR has signed a non-binding framework agreement with China National Chemical Engineering Sixth Construction Co., Ltd (CC6) to deliver front-end engineering and construction for Phase 1 of the project.
This collaboration with CC6, a seasoned Chinese engineering firm renowned for its experience in industrial processing plants, could be transformative for Ferro-Alloy Resources, opening the door to potential Chinese funding and accelerating the project timeline.
A Key Milestone for the Balasausqandiq Project
The agreement marks a crucial milestone in FAR’s journey to bring the Balasausqandiq Project to life. Under the framework, CC6 will provide both front-end engineering and design (FEED) and engineering, procurement and construction (EPC) services. While the agreement is currently non-exclusive and subject to further negotiation, it sets the stage for a formal partnership, expected to be concluded later in 2025.
Duncan Hay, Research Analyst at Panmure Liberum, commented: “FAR and China National Chemical Engineering Sixth Construction Co., Ltd (‘CC6’) have entered into a non-binding, non-exclusive framework agreement to design and construct Phase 1 of FAR’s flagship Balasausqandiq Project in Kazakhstan.”
He added, “Completion of the feasibility study (due this month) will undoubtedly be a key catalyst for FAR – triggering discussions with various potential investors / debt providers. However, today’s news of a framework agreement with a highly-experienced Chinese engineering firm could also help unlock specific funding options in China, and is a positive step towards development of Phase 1 at Balasausqandiq.”
Why CC6?
Founded in 1965, CC6 is a wholly owned subsidiary of China National Chemical Engineering Group Corp and brings with it a formidable track record. It has delivered over 4,000 industrial projects across more than 20 countries, including Kazakhstan, and boasts particular expertise in vanadium processing—having completed more than 50 projects in this field alone.
Such a background makes CC6 an ideal partner for Ferro-Alloy Resources, not just in terms of engineering excellence, but also in potentially unlocking strategic funding channels within China.
Financial Snapshot
Ferro-Alloy Resources maintains a market capitalisation of £28.4 million with a share price of 8.6p as of 30 May 2025. Despite operating losses in recent years, Panmure Liberum has kept its “BUY” recommendation intact with a target price of 34p. The research note outlines an expected sales surge to $40 million in 2027, supported by an EBITDA turnaround to $21.3 million and EBIT of $19.4 million.
The company’s financial transformation is projected to continue through the decade, as the Balasausqandiq Project reaches full operational capacity. Significant investment will be required to build out the infrastructure—estimated at over $100 million in capex in 2026 alone—but this is aligned with FAR’s long-term strategic vision.
Market Outlook and Vanadium Trends
Vanadium prices, which have halved over the past two years to below $5.0/lb, appear to have found a floor thanks to stabilising global steel demand and supply cuts in response to weaker pricing. The report from Panmure Liberum notes that these conditions, combined with China’s strategic shift to higher-quality steel and increased use of alloying agents, bode well for vanadium’s long-term demand.
There is also growing optimism around vanadium’s role in energy storage solutions, particularly in vanadium redox flow batteries (VRFBs), which could provide a future demand tailwind.
Operational and Financial Highlights
Here are key takeaways from the report:
- Framework Agreement: Signed with CC6 to develop Phase 1 of Balasausqandiq.
- Feasibility Study: Expected completion in June 2025.
- Production Outlook: Zero revenue expected in 2025-2026, rising sharply to $40m in 2027.
- EBITDA: Turning positive to $21.3m in 2027.
- Projected Capex: $101.7m in 2026 and $73.9m in 2027.
- Long-term Growth: Revenue forecast to hit $307m by 2030.
- Net Debt: Expected to swing significantly with funding requirements, reaching $127.1m in 2027.
On a Final Note
Ferro-Alloy Resources’ partnership with CC6 is a significant and strategic step toward delivering one of the world’s most promising vanadium projects. While the agreement remains non-binding for now, it clearly signals FAR’s intent and strategic direction. The forthcoming feasibility study and expected contract awards by the end of 2025 may be key inflection points for the business. With vanadium playing a crucial role in both traditional and emerging industries, FAR is positioning itself for a potential breakout.
Panmure Liberum’s endorsement, with its unchanged “BUY” recommendation and target price of 34p, reinforces confidence in the company’s long-term prospects.
