This is the second 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.
Technology Metals Australia (ASX:TMT) is an advanced vanadium developer that has entered the global market at a pivotal time for the silvery white metal.
As reported in part-one of this series, the company is steeling itself to execute a charged up dual track strategy to be Australia’s first vanadium producer. Technology Metals 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 the singular focus, Managing Director Ian Prentice tells Mining.com.au, the strategy for targeting both 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.”
As reported in part-one, Tata Steel is the largest steelmaker in India with an annual crude steel production capacity of 34 million tonnes per annum, with products including automotive and structural steels. Technology Metals has a Memorandum of Understanding (MoU) with the company as it seeks to supply the large market with its product once in production. 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.
Charged for the long haul
India in particular is an attractive market, Prentice says. India’s steel demand is on track to increasing to 9% of global consumption by 2032. Incremental steel production in the country is poised to increase 5% year on year and total FY23 Indian import of vanadium is forecasted to be 33% higher than in FY22.
India has also made a pledge to achieve net zero emissions by 2070. Prime Minister Narendra Modi has committed to a number of concrete goals – slash India’s greenhouse gas emissions by a billion tonnes by 2030 and increase non-fossil fuel power generation from the current 150GW to 500GW.
To reach this ambitious target, the country will need to invest about US$500 billion in clean energy and improvements to the grid, according to Bloomberg New Energy Finance. The International Energy Agency (IEA) has modelled the cost of power generation from solar sources in India and it is a cheaper option than coal or gas-fired power stations, and at the same time make the country’s air much cleaner.
“With solar and wind, you need that long duration energy storage solution that VRFB are so suited for in terms of load shifting”
The MD says: “With solar and wind, you need that long duration energy storage solution that VRFB are so suited for in terms of load shifting. The incentives to really accelerate India’s energy transition are there, and the government is supporting that industry through incentive schemes. One of our battery industry partners, Delectrik Systems, a VRFB manufacturer based in India, was a recipient of that Indian government support through the Clean Energy International Incubation Centre (CEIIC) initiative. They already have 100 VRFB of varying wattage on their order books.
Obviously, with the Inflation Reduction Act 2022 in the US and the Green New Deal in the EU, there is a lot of renewable energy and energy storage activities happening in those markets too. Investments in the US renewable energy sector are set to reach US$114 billion a year by 2031, and in Europe, it looks like there will be up to EUR 225 billion mobilised over this decade. So, there is global mobilisation towards renewable energy, and India with the world’s biggest population will be a key player in this transition.”
Global vanadium demand for VRFBs is expected to grow to 33% in 2030, according to Wood Mackenzie. The market in balance was about 220,000 tonnes V2O5 in 2022, yet consumption is projected to grow to 380,000t V2O5 by 2031.
While solar and wind generate very cheap electricity, long duration energy storage is needed to maximise efficiency. VRFBs displace lithium-ion batteries for long duration storage with low maintenance costs, long operational lifetimes, and low performance degradation.
Additionally, by 2050, Australia will require 50GW/1,000GWh of energy storage, the Australian National University Centre for Sustainable Energy Systems notes.
To date, the world’s largest VRFBs being developed are in China, where the government banned the use of lithium and sodium-sulphur batteries for large-scale energy storage due to safety issues. VRFBs have in turn been promoted as a safer option.
Therefore, the market looks ripe for Technology Metals to take charge. The vanadium pentoxide price has been relatively stable since late 2022, rising from mid-2022 lows of about US$7.50 to $8 per pound, with steady demand evident as China emerged from its COVID zero policy and the European and North American demand remained strong. Uncertainty remains in broad sectors of the market as to the ongoing impacts of the Russian invasion of Ukraine on the supply of Russian vanadium products.
However, Prentice notes that an often forgotten driver of vanadium demand is in fact the steel sector which is one of the largest CO2 emitters. Studies show that a single tonne of steel is equivalent to 1.85 tonnes of CO2 released. Some 8% of global CO2 emissions in 2020 came from steelmaking. The inclusion of vanadium enables higher quality, stronger steel, and lower emissions, he adds.
He says: “The intensity of use of vanadium in Indian steel is forecast to go from 39g/t of steel to 58g/t by 2030, a near 50% increase in intensity of use which is compounded with the overall growth in steel volumes. So, while product purity may not be the main consideration for the steel market, the quantity demand is definitely evident.”
Sustainability ethos embedded into company culture
As Prentice notes to this news service, Technology Metals Australia’s strategy is 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.
However, to achieve its mission, the company understands that it is incumbent on it to not only produce a raw material integral to a green future but do so in an environmentally friendly way.
The company is maintaining a clear focus on the timely progression of the development of the MTMP while ensuring that all its activities are in accordance with the company’s core mission and values consistent with its holistic ESG strategy.
Prentice says the company is committed to developing the project to the highest levels and is working with specialist groups WSP Golder, Integrate Sustainability, and other key stakeholders on the continuing journey to develop its ESG strategy, priority action plan and reporting structure.
To this end, Technology Metals has committed to reducing greenhouse gas emissions at the MTMP through the planned installation of a 12-24MW solar farm coupled with battery storage, and roof-mounted solar arrays for all accommodation buildings and walkway areas at the village. The company is also investigating a low carbon energy solution for mine dewatering and water supply activities and exploring the incorporation of unique heat loss and capture strategies and energy recovery at the processing plant.
The roasting kiln it will be using is 130m long and 6m in diameter and needs to be heated up to 1,200 degrees Celsius.
The MD adds: “We are using gas as the energy source, and this in itself compared to some of our peers who are using bunker oil and coal, is cleaner and more efficient. We are therefore investigating how we can capture this heat being generated and recover it back into the system.
But it’s not only the carbon emissions we are minimising. Water is an important resource that we are also working out ways to conserve, and the plan involves recycling and reuse wherever possible at the processing plant.”
Prentice notes that environmental factors and carbon footprint are “definitely in the forefront of the MTMP project team’s minds when it comes to equipment selection and design”.
“We consider everything, such as layout and route of mining haul roads to ensure the most efficient footprint is utilised – reducing both environmental impact and carbon emissions.
“We consider everything, such as layout and route of mining haul roads to ensure the most efficient footprint is utilised – reducing both environmental impact and carbon emissions”
Our ESG Policy and Climate Change and Emissions Policy demonstrate our commitment to identification and implementation of emissions reduction initiatives, and the team is actively collaborating on reporting frameworks and data collection mechanisms. It is also part of our commitment in our ESG Policy – and this is already in action in the office – to encourage our people to not only be aware of their ESG obligations but are empowered to speak up about ideas and potential initiatives. This allows for some lively debates in the office and really builds that sustainability ethos into the culture.”
The Yugunga-Nya (YN) cultural community, represented by the Yugunga-Nya Native Title Aboriginal Corporation have non-exclusive native title over lands including the MTMP area. The company continues to engage constructively with the YN cultural community and YN PBC to enable informed consultation in regard to the proposed development of the MTMP Project.
Strong institutional support
This mindset bodes well for many institutional investors, some of which are backing the company. As of 10 May, its 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%).
As reported by Mining.com.au on 24 May 2023, Technology Metals 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, effectively increasing its existing cornerstone shareholding to about 18% (post placement). RCF VII has been a cornerstone investor in the company since 2021.
RCF is a group of commonly managed private equity funds, established in 1998 with a mining sector specific investment mandate spanning all hard mineral commodities and geographic regions. Since inception, RCF has supported 203 mining companies, with projects located in 51 countries and across 32 commodities. It aims to partner with companies like Technology Metals to build strong, successful, and sustainable businesses and in doing so strives to earn superior returns for its shareholders.
Additionally, as previously mentioned Technology Metals and EKF have had positive and strong engagement over several years, with the aforesaid LoI marking a significant milestone in the progression of the relationship. The EKF LoI contemplates financing support of around A$150 million subject to, among others, sufficient Danish economic interest in the MTMP, approvals, satisfactory documentation, and customary due diligence.
EKF supports Danish businesses and the export of equipment around the world and has extensive experience working with FLSmidth, a key equipment supplier for the MTMP. Technology Metals has worked with FLSmidth, a global pyro-processing technology company, specifically in salt roast-water leach processing for vanadium extraction, since early 2018.
This relationship started with batch scale salt roast-water leach testwork, progressing through to large-scale continuous pilot plant kiln testing utilising a 9.8m long kiln at FLSmidth’s pyrometallurgy facility in Bethlehem, Pennsylvania. A total of 7.5 tonnes of magnetic concentrate from the MTMP was processed through the pilot plant kiln in mid-2019, confirming ‘world leading’ vanadium recovery rates utilising conventional processing technology. The scale of the completed pilot plant testwork, with continuous roasting of a large scale bulk sample, which Prentice notes sets Technology Metals and the MTMP apart from its peers.
Another aspect that is setting the company apart from its peers is the ongoing interest it is receiving from end users, globally.
“Discussions with potential offtake partners in both the steel and battery markets are ongoing and positive”
“Discussions with potential offtake partners in both the steel and battery markets are ongoing and positive. At present, we are understanding our customers’ demand profile, providing samples, and discussing product specifications. Our observations of the market indicate that the demand profile from steel and battery sectors will likely be heading towards 50:50, however given the steel production growth in India, the steel end market will likely still dominate during this infrastructure investment surge.”
Technology Metals’ vision is to be a leader in the Australian and international vanadium industry playing a crucial role in meeting a growing demand for a critical metal that helps the world to decarbonise. Together with vLYTE, TMT’s wholly owned subsidiary focused on adding downstream value to high-quality feedstock, the MTMP will be a strategic, long-life asset supporting the nascent and fast-growing vanadium redox flow battery industry.
Write to Adam Orlando at Mining.com.au
Images: Technology Metals Australia Ltd