Vanadium: Trends in Exploration, Markets and Future Demands (aedbcff5-ad21-4877-bbb9-8aa19e8d817b)

"INTRODUCTION The recent drop in iron ore prices has claimed an unwitting casualty in vanadium. Vanadium is dominantly produced as a co-product of steel production. The recent shutdown at EVRAZ’s Mapochs steel-vanadium operations in South Africa has cut-off 10% of the world’s vanadium output. Earlier in February, 2015, Australia’s Atlantic Ltd. suspended operations at its Windimurra iron-vanadium complex after a fire caused severe damage at the plant. Since then, challenging market conditions has resulted in the permanent closure of this operation. This decoupling of vanadium production from integrated iron ore producers presents an opportunity for vanadium exploration companies to target single-product deposits. This trend is manifested in the increasing number of pure-play vanadium ventures around the world.The mine production of vanadium is dominated by three countries namely, China, South Africa and Russia, which collectively produce 98% of the world’s vanadium. While the use of vanadium as an alloy in the steel industry remains by far the largest application for this metal, growth in demand is expected to come from the renewable energy industry in the form of batteries for energy storage. This paper summarizes the current state of vanadium exploration, briefly describes the vanadium market and lists sources of future demand for the metal. TREND IN VANADIUM EXPLORATION The most active participants in the current vanadium exploration are pure-play vanadium ventures in Brazil, South Africa and Australia. These ventures are targeting deposits with higher vanadium grade than those typically mined in titaniferous magnetite operated by integrated steel-vanadium producers. The 10% shortfall in vanadium production resulting from the shutdown at EVRAZ’s Mapochs is expected to be partially compensated by Largo Resources’ Maracás Menchen vanadium operation located in the State of Bahia in Brazil, which commenced operation in August 2014 and is expected to reach design capacity of 11,400 tonnes of vanadium pentaoxide (V2O5) by the end of 2015. The estimated production1 for 2015 is 6,500 tonnes of V2O5 at a target production cost of $3.60/lb. This is the first vanadium operation to be placed in production in the Western Hemisphere in over 35 years."