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Ben - It is about raising the profile of the VRFB sector/technology and we need bigger players to step in to help commercialise the technology to demonstrate it is safe, reliable, cost competitive, efficient etc etc.
The Chinese won't be a competitor to BMN the market opportunity is massive even with what Dalian is proposing is a drop in the ocean 2GWh per annum is nothing given the amount of long term duration storage that will be needed to meet climate change commitments by countries all over the world.
BMN are focusing on the South African VRFB market which requires beneficiation to the SA economy in order to win contracts, I don't even think the Chinese can apply! Also apparently transporting electrolyte globally is expensive...
Do you really think the PRC are going to be keen on exporting VRFB's/Vanadium once they have the ability to resolve their own energy storage needs right on their doorstep?!
BMN already has electrolyte orders, FM has recently stated that very clearly.
Nice work guys but I’ll not get too excited by this news. My only take away is that this should keep V prices firm for a few years. Bushveld started its VFRB mission a couple of years ago, so I’m sure they all know of each other as it is a small industry. All just being friendly and gabbing some free PR, IMO.
They are our competitor and will likely undercut us on cost when they are up and running. They will have the advantage of scale and are getting V from sl*g as a by-product which is cheaper. I hope that Fortune is not thinking about some similar arrangement to fund a steel mill at Mokopane with them. I fear they would eventually eat us up, but it may appeal to some as it would surely raise the SP!
I do not see us working with them anymore than working with Largo, except to create an industry standard for electrolyte if that is wanted/needed. What I am seeing is V producers preparing for the VRFB market. There will be lots of competition in a couple of years. We need to use our advantage as an early leader in the sector while the Chinese are tied up for the next couple of years on State projects. We have to get our own clients and orders, and also get costs back under $25 Kg.
I’ll start getting excited when BMN announces some of its own electrolyte orders. Thanks for your views though!
And if I may put that into context, China consumed 60% of global vanadium production in 2020 (which equates to c.67,000 tons of Vanadium - Per TTP from the recent Vanitec webinar).
My understanding is that 1mwh of electrolyte requires 5.5 tons V (which equates to 9.25 tons of V205).
Therefore this new deal is ringfencing c.12,000 tons of Vanadium (20,000 tons V205), which is approximately 18% of China's 2020 vanadium consumption solely for flow batteries.
Hence why Roskill state in their recent update "This represents a new precedent in vanadium market dynamics and has been reinforced by vanadium producers planning to vertically integrate mining and recycling operations downstream to VRBs."
Hopefully that clarifies why some investors on here are getting excited by the magnitude of this news.
See below -
Pansteel signed a cooperation framework agreement with key domestic vanadium flake supplier Sichuan Desheng to set up a joint venture focusing on processing vanadium ****. Pansteel will contribute 65-70pc of cash capital, while the remainder will come from Sichuan Desheng. The joint venture will build a vanadium **** processing facility with 20,000 t/yr vanadium pentoxide equivalent of capacity.
So the Chinese state ARE ringfencing 20,000 MTV205 per annum specifically for VRFB usage via a new processing facility.
Yes Lindon is correct no direct deal between BMN and BNM for now but the convo clearly shows how well connected the key players in this space are and Fortune is right up there.
China is king when it comes to battery manufacturing and they clearly know it makes sense for them to service their grid storage needs via VRFB's given the resources they enjoy at home.
Ben, via LinkedIn Fortune congratulated their sales director Jerry Qiu on the deal. Jerry replied suggesting they could work together to promote the V industry and asked Fortune to get in touch if he ever had any such desire to do so. They are NOT currently in talks (as has was implied earlier) Hence no reason for any RNS releases.
Thank you LB21 for your clear explanation.
How would they work together? - Fix electrolyte prices?
The world supply will not cope if/when the demand for VFRBs takes off. China is a net importer now, so some Chinese consumption may be rationed for the State to build its showcase battery. Its a hell of a lot of vanadium. ATB!
The big deal is that the largest steel/vanadium producer in the world (Pangang owned by the Chinese state) has agreed to supply V to Dalian Bolong (BNM)) who can make electrolyte on a mass scale and jointly they have agreed to commercialise VRFB's.
The side story is that Fortune congratulated BNM on LinkedIn and the director responded saying that together they (BNM and Pangang) and BMN should work together to commercialise the VRFB opportunity.
Clearly Fortune is very well connected globally to all the key players.
As he recently said, big things brewing, stay tuned.
Doh! Should have gone to spec.......! Wondered why they would do such a thing and it was not RNS worthy! Whats the big deal then? Lol!
I think you may be confusing BMN with BNM....
So that suggests to me that either, BMN sees a need to supplement the volume of vanadium that they can produce themselves, to be able to meet potential electrolyte demand that they can see being needed over the next few years, or it is insurance. I think it is a contingency to cover and guarantee the ability of BE to deliver, and build confidence with its customers to be able to place orders with them.
BNM signed agreement with Pansteel to boost Vanadium Flow Battery industry
On September 10, 2021, Dalian Bolong New Materials C., Ltd. (BNM) and Pangang Group (Pansteel) signed a frame agreement on the vanadium co-operation for the vanadium flow battery industry. This agreement will allow BNM to obtain stable vanadium supply from Pansteel in the application of energy storage. This agreement will accelerate comprehensive utilisation of vanadium resources in the Panzhihua region and promote the upgrading of the vanadium industry.
Dalian Bolong New Materials (BNM) is the world's largest producer of high-purity vanadium products and vanadium electrolyte. BNM has already built state-of-the-art facility with mass production of electrolyte up to 1GWh annually.
Pansteel is the world’s largest producer of vanadium pentoxide from VTM resouces. The output of Pansteel is aobut 40,000 tons per year. On September 04, 2021, Pansteel signed a cooperation framework agreement with key domestic vanadium flake supplier Sichuan Desheng to set up a joint venture focusing on processing vanadium ****. Pansteel will contribute 65-70pc of cash capital, while the remainder will come from Sichuan Desheng. The joint venture will build a vanadium **** processing facility with 20,000 t/yr vanadium pentoxide equivalent of capacity.
Market participants estimate around 9.25t of vanadium pentoxide is used in each MWh of vanadium storage battery. China is expected to install around 30-60GWh of new energy storage capacity by 2030, corresponding to 28,000-56,000 t/yr of extra demand for vanadium pentoxide during 2021-2030.
Its BNM who have signed an agreement with Dalian Bolong. Bolong New Materials (BNM) , not sure if that is a coincidence. Could not see Fortune or Bushveld mentioned?
Anyone able to cut and paste as I do not have linkedin.
Repost before it slides out of view....
Why hasn't this been mentioned by the company via their social media?
Not sure you can think you need to be a member.
Search for Jerry Qiu and you'll be able to see his post re the deal and his comments.
Is no one going to share the link re. Dalian Bolong director and Fortune?
Lots of little littlegunners on Twitter which one should we address our requests to join the telegram group?
Very much agree mogwhy. The telegram group serves a valid purpose and has a lot of good researchers there but the audience is too closed. It would be much better for all if people posted their research in both places to cover a wider audience, specially those that are not already invested. Being in both works well.
Ah yeah, you've reminded me that it's currently a closed group meaning I can't send you a link to auto join, so you'll have to contact littlegunner on Twitter in order to gain access
Not being techy, I have asked for info on how to join but I never seem to get a reply on how you do it ??
You guys need to join the Telegram group then!
Thanks LB21 - it's a shame that the telegram group don't share this type of info with the rest of the investment community.
They don't need to involve themselves in discussion here but it would be nice if someone could just post a link and any other helpful info that would support the investment case.
Helpful for the short term Mogwhy but what got me excited over the weekend was seeing (via a link shared on the Telegram group) that Fortune and one of the directors at Dalian Bolong were talking about working together to support the vanadium flow battery industry going forward.
Noting Dalian Bolong have just signed an agreement with the largest vanadium producer in the world (which is owned by the PRC) to secure v205 for their expansion plans.