RE: SP Angel BMN23 Oct 2018 12:17
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Stone coal environmental restrictions – The processing of stone coal produces by-product vanadium in China accounting for >87% of China’s vanadium reserves. The extraction of vanadium via roasting is associated with environmental pollution, with Chinese environmental restrictions removing significant portions of production off the market. Alternative experimental, cleaner leaching methods may or may not restore production from this source.
Scrap (Secondary 10% of market) – China’s ban on scrap imports is forecast to remove approximately 4,500-5,500tpa of V2O5 production. According to an announcement on the Chinese Ministry of Environmental Protection website, all four categories of vanadium scrap are “forbidden” to be imported into China under new regulations came into effect after December 31, 2017. This is creating serious tightening in the scrap market limiting the availability of raw material.
Primary (Mine) production (17% of market) – There is limited primary production entering the market with a number of projects with primary JORC resources undergoing scoping studies to meet the growing requirement for vanadium pentoxide. Many will require time for further resource definition, feasibility study work and significant capital before commissioning and eventual production.
Developers and explorers with high grade projects are:
Australian Vanadium: Gabanintha (Australia) – 175.5Mt Resources @ 0.77% V2O5
TMT Ltd: Gabanintha (Australia) – 16.7Mt Reserve @ 0.96% V2O5
VanadiumCorp: Lac Doré (Canada) – 99.1Mt @ 0.43% V2O5
Tando Resources (South Africa) – 513Mt Inferred (SAMREC) @ 0.78%
Golden Deep (Namibia) – 1.12Mt Inferred @ 1.28%
Ferro-Alloy Resources (Kazakhstan) Balasausqandiq vanadium deposit – proposed 5,600tpa V2O5 in Stage 1 rising to 22,400tpa in Stage 2
Production may also be supported from a number of proposed poly-metallic projects in future years, although project viability will also be tied to the production of associated metals including iron, graphite, titanium and uranium. The fastest of these new co-product supplies is likely to be from smaller graphite mines but will still take time to build co-product process lines.
In conclusion: If China maintains its Green Shield environmental policies and steel producers continue to use Australian iron ore in preference to other, less clean, sources of iron feedstock then the vanadium market should see a very substantial deficit and prices could remain at relatively high levels for the next few years. The risk is that the market situation may become so severe so quickly that that consumers will have to either slow production or find ways to either substitute vanadium or to increase the tensile strength of steel in other ways.
Either way, it looks as if vanadium prices are going to remain stronger for longer.
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