The Lumina Group started to look at vanadium given its potential in the battery space, as well as its increasing use in the steel and rebar markets. Vanadium is a unique metal for a variety of reasons:
- Most of the production is as a by-product or secondary product out of steel manufacturing. This means that supply is less likely to react when prices increase.
- There are currently only two primary producers in the western mining world, Largo (TSX:LGO) and Bushveld (AIM:BMN).
- Vanadium redox batteries (“VRB”) are a relatively small market at present but have the potential to grow for two reasons. The first is overall growth in the grid scale storage market to smooth out energy production from renewables. The second is the technology is superior in numerous ways for grid scale storage compared to its main competitor lithium ion batteries.
Prices peaked in 2018 when China increased their standards for the strength of rebar, which requires more vanadium. Although prices have fallen since then, we believe this will provide a long-term structural increase in vanadium demand. That coupled with the potential of the VRB market has the group excited about the prospects for the metal.
Projected Growth in Global Energy Storage
Global Battery Storage Deployment Forecast (GWh)
Key focus: What share of this market will VRB technology take?