Technology Metals Australia: charging ahead with a dual track strategy targeting the steel and battery sectors

This is the first in a two-part feature series.

This article is a sponsored feature from Mining.com.au partner Technology Metals Australia Ltd. It is not financial advice. Talk to a registered financial expert before making investment decisions.

Advanced vanadium developer Technology Metals Australia (ASX:TMT) is entering a pivotal time for the silvery white metal and is steeling itself to execute a charged up dual track strategy.

The company is advancing towards bringing the world’s next large-scale primary vanadium mine online, with financing support and construction partnerships in place for its flagship Murchison Technology Metals Project (MTMP) in Western Australia.

With a singular focus to become the first vanadium producing company in the country, Technology Metals Australia is making inroads to supply the global steel and battery sectors with vanadium.

As Managing Director Ian Prentice explains to Mining.com.au, the strategy for targeting the steel and batteries sectors is straightforward – they are the 2 key end user markets for vanadium. Steel as the established traditional market and batteries as the rapidly growing market set to eclipse steel in the foreseeable future.  

In the battery sector in particular, given the requirements for high-purity vanadium pentoxide being utilised in vanadium electrolyte for vanadium redox flow batteries (VRFB), Technology Metals’ ‘high-purity’ MTMP vanadium pentoxide is emerging as the ideal product to meet global needs.

“Long duration energy storage solutions have become the question on people’s minds – with renewable energy installations, be it wind, solar, or hydro, being rolled out around the world rapidly to meet the commitments of the energy transition, what type of battery technologies are being deployed to support load shifting, grid stabilisation, and bulk power management? 

At the moment, lithium-ion batteries are the prevailing technology, however with the demand from, and deployment into, electric vehicles, trucks, and other mobile applications, and the inherent deficiencies in this technology for long duration large scale storage, what other technology is available, or indeed even more suitable, for long duration energy storage? This is where the demand for vanadium and the VRFBs really comes through.”

Prentice adds that additionally, the world’s need for high-strength steel remains consistent, with modest growth linked to GDP, save for some key regions such as India and Southeast Asia, which are experiencing faster demand growth due to their rapid urbanisation and infrastructure development goals. 

The incremental steel production in India is a case in point and is forecast to increase 5% year on year, and for Southeast Asia 4.6% year on year. While the increase in actual steel production is important, he tells this news service that for the vanadium market, it is the steel-specific vanadium intensity of use that is sparking that demand. 

“The MTMP is well-placed for both the steel and battery markets due to a number of factors. Firstly, as a primary vanadium mine, the production to meet this growing demand is not contingent on the co-production of steel, that is, from vanadium bearing slags. Secondly, the carbon footprint of primary vanadium production from MTMP, using gas as the energy source, is lower than the carbon footprint from co-production and the incumbent primary producers. 

“The MTMP is well-placed for both the steel and battery markets due to a number of factors…”

In addition, China and Russia currently dominate the supply of vanadium. Supply disruptions from these jurisdictions can affect the West’s vanadium requirements, so the MTMP, being in Australia – and namely Western Australia currently the world’s second most attractive mining jurisdiction – is a highly attractive alternative supply source. And lastly and most importantly, as previously touched on, the MTMP’s high-purity vanadium has already been used in electrolyte developed by our Japanese partner LE System and undergone mini-cell testing to demonstrate that it meets the specifications of major VRFB manufacturers. So, the MTMP vanadium ticks a lot of boxes.”

Right place at the right time

As far as ticking boxes goes, Technology Metals has ticked one of the biggest of them all. According to the Fraser Institute, Western Australia is the second most attractive mining jurisdiction in the world. The institute is an independent non-partisan research and educational organisation based in Canada.

Australia also hosts 18% of the world’s vanadium resources and is emerging as an alternative source of new supply outside of China, Russia, and South Africa, all of which have associated sovereign risk as locations for investment. 

Another box the company has ticked is receiving interest and backing from institutional investors. As of 10 May 2023, the company’s significant shareholders included Resource Capital Fund VII L.P. (17.1%), BNP Paribas Nominees (10%), Standard Pastoral Company (6.7%), and Retzos Group (5.2%).

Today (24 May 2023), Technology Metals announced it has received firm commitments to raise $11.5 million secured from existing and new strategic and institutional investors. RCF VII has committed to participate for $2.75m of the placement shares, effectively increasing its existing cornerstone shareholding to about 18% (post placement). RCF VII has been a cornerstone investor in the company since 2021.

However, in terms of the place to be for vanadium supply, the MD notes that the clear and obvious strategic choice to target is India. The demand from the Indian steel market in particular, on the back of its government’s announcement of upgrades into its railway and road infrastructure, is accelerating this decade. 

Prentice explains to Mining.com.au that the Indian Railway Ministry is investing US$680 billion to upgrade the country’s network of aging railway infrastructure by 2030 – this includes electrification, upgrading existing lines to high-speed rail, expansion of new lines, and development of freight-only corridors. A specific rail track type in India called the “R260 Grade” will be mandated, which is used for train speed above 120km/h – the R260 Grade contains vanadium as the alloying element. 

“In terms of roads, they are adding 10,000km of highway a year across the country. Again, this will require vanadium-strengthened steel for structural strength in bridges etcetera. India will spend 1.7% of its GDP on transport infrastructure alone this year. The steelmakers in India are also investing in their production facilities to meet this output demand, estimated to be up to US$110-140 billion by 2032. The production output in India is expected to reach 300Mt by 2030, up from 134Mt in 2022.

This bodes very well for TMT and the MTMP vanadium – our MoU with Tata Steel, India’s largest steelmaker, signed in October 2022 allows us to have these meaningful conversations about quantity, specification, delivery timeframes, and other collaborative technical discussions.”

According to the MD, Technology Metals has had conversations with Tata Steel and the company’s wider research indicates that India imports most of its vanadium from China and Russia. India, like  many other countries, is seeking to diversify its supply chain especially when it comes to critical minerals. 

“So, in a manner of speaking, the competitive landscape is to Technology Metals’ advantage as the customers are already seeking out alternative supply partners”

“So, in a manner of speaking, the competitive landscape is to Technology Metals’ advantage as the customers are already seeking out alternative supply partners. Having said that, the focus for us is to ensure that we continue to maintain our lowest quartile operating cost advantage while offering a product specification that suits the requirements of the customer, regardless of the competitive landscape. 

We are seeing from the analyst forecasts that India’s overall vanadium demand will reach 65,000t by 2030, and for steel-specific vanadium demand, 17,000tpa by 2030. With the MTMP set to produce 12,500tpa of V2O5, even if all our product goes to India, that isn’t enough vanadium to meet their demands, so there is room for other vanadium players.”

It appears that some in the market not only see the company’s importance but are making room for Technology Metals to be a major player in the market. 

In addition to today’s announced capital raising, in which the proceeds will be applied to the workstreams being carried out to progress development of the MTMP, Technology Metals has also received a letter of interest from Danish Export Credit Agency EKF with regards to potential funding support of around A$150 million for the project. 

Through its 100% owned subsidiary, vLYTE, Technology Metals Australia has also progressed various projects that are focused on the development of a vanadium flow battery industry in Australia. 

This includes the production and performance testing of high quality vanadium electrolyte from high purity vanadium material sourced from the MTMP. The project’s implementation phase was advanced during Q1 2023, with activities including the engagement of GR Engineering Services (ASX:GNG) and Iron Mine Contracting to work alongside the company’s project team and FLSmidth.

Technology Metals has now executed an MoU with fast-growing Indian VRFB maker, Delectrik Systems for the potential sale of vanadium raw material from the MTMP as well as supply of vanadium electrolyte by vLYTE to Delectrik within Australia.

Dual track strategy – singular focus

Prentice explains that these agreements simply signal that the company is entering a pivotal time in the vanadium market, with supply to the traditional steel market under pressure from global VRFB deployments in parallel with a faster than expected rebound in demand from aeronautical applications. This demand side shift, he says, is happening at a time of geopolitical uncertainty, highlighting the significant supply chain advantages of developing a ‘high-quality’ vanadium project in Australia.

The MD adds that as Technology Metals progresses work programs required to ensure the efficient and effective development of the long-life MTMP it has seen significant interest from market participants interested in potential offtake of vanadium products.

This is evidenced by its aforementioned talks with Tata Steel, the largest steelmaker in India with an annual crude steel production capacity of 34Mtpa, and products including automotive and structural steels. The company has a Memorandum of Understanding (MoU) with Tata Steel. It is also engaging LE System, which is a major Japanese supplier of vanadium electrolytes to VRFB manufacturers, running a state-of-the-art plant with a production capacity of 5,000m3 per annum of electrolyte.

In part-two of this series, the MD outlines how Technology Metals Australia is working to meet global vanadium demand via a strategy to develop and operate a world-class critical minerals project that makes a positive difference to the local community, minimises impacts to the environment, and contributes to global decarbonisation.

He notes that through this strategy, Technology Metals is well-positioned to capitalise on large and attractive markets such as India in terms of both the steel and battery sectors.

Write to Adam Orlando at Mining.com.au

Images: Technology Metals Australia Ltd
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Written By Adam Orlando
Mining.com.au Editor-in-Chief Adam Orlando has more than 20 years’ experience in the media having held senior roles at various publications, including as Asia-Pacific Sector Head (Mining) at global newswire Acuris (formerly Mergermarket). Orlando has worked in newsrooms around the world including Hong Kong, Singapore, London, and Sydney.