Vanadium is becoming more important as demand broadens beyond steelmaking into energy storage, while global supply remains heavily concentrated.
Steel remains the main market for vanadium, where it is used to increase strength and durability. However, vanadium redox flow batteries are creating an additional source of demand. These batteries are designed for large-scale stationary energy storage and are particularly suited to applications where electricity must be stored for long periods.
Grid-scale storage is becoming increasingly relevant as renewable power generation expands. Vanadium flow batteries offer long operating lives and can be scaled by increasing the amount of electrolyte used. Their electrolyte can also be reused over extended periods, supporting the case for the technology in long-duration storage applications.
At the same time, vanadium supply is concentrated in a small number of countries. China accounts for more than 72% of global production and Russia around 18.5 per cent. That concentration increases the strategic value of new sources of supply elsewhere.
Kazakhstan is one country seeking to build a larger role in the vanadium market. Ferro-Alloy Resources is developing the Balasausqandiq deposit in Kazakhstan and holds rights covering seven known ore bodies.
The latest resource estimate for Balasausqandiq covers 32.9 million tonnes at an average grade of 0.62 per cent vanadium pentoxide. That estimate relates to only one of the seven known ore bodies, giving the company further development potential if additional areas are brought into production. Balasausqandiq also has a processing advantage that could influence project economics. Many vanadium deposits are hosted in titano-magnetite ores and require roasting before extraction. Balasausqandiq is shale-hosted and can be processed using whole-ore acid leaching instead.
Ferro-Alloy Resources believes this processing route can support a lower-cost operation compared with more conventional vanadium projects. Cost positioning will be important if the company moves into commercial production, particularly in a market where pricing can be cyclical.
Ferro-Alloy Resources Ltd (LON:FAR) is developing the giant Balasausqandiq vanadium deposit in Kyzylordinskaya oblast of southern Kazakhstan. The ore at this deposit is unlike that of nearly all other primary vanadium deposits and is capable of being treated by a much lower cost process.
