The world‘s largest battery: A 200MW/800MWh vanadium flow battery under construction in China, part of a Chinese government investment to spur the technology. (Source)
2017 was a great year for battery metals and the talk of the town was clearly cobalt when its price more than doubled. Lithium prices were also surging and even nickel and copper prices were in an uptrend. However since the beginning of this year, all of them are taking a breather, correcting in tandem.
There‘s another battery metal, which rose even stronger than cobalt last year and continues to surge this year: Vanadium, the extremely hard yet ductile and malleable silvery-grey metal named after Vanadis, the Scandinavian goddess of beauty.
And the beauty of vanadium is not only its impressive price performance (+700% since 2015 and +300% since 2017) but that supply and demand look all the more bullish. Demand has increased significantly over the last years, whereas supply is steadily decreasing due to mine depletion and environmental restrictions.
In late 2017, China applied new steel reinforcement standards to fight floods and earthquakes, with new regulations requiring a doubling of vanadium content in the steel used for high-rise constructions, for example.
About 90% of global vanadium supply is used to harden steal, however the metal is also used to prevent global warming, that is to say in an increasing fashion.
With lithium being the metal of choice for powering electric vehicles, vanadium could become its counterpart for powering stationary batteries such as large utility-scale systems to store mass energy from wind and solar parks. Similar to zinc-air flow batteries, vanadium batteries offer tremendous advantages against large stationary lithium-ion battery systems.
Today, Maxtech Ventures Inc. announced the acquisition of 2 large vanadium properties (3,500 hectares) in the state of Bahia, Brazil. The company also formed a vanadium exploration-research team to work on identifying further potential vanadium mineralization deposits in other Brazilian areas of interest where Maxtech has already established high-grade manganese assets (see report here).
What makes today‘s acquisition so attractive is its prominent neighbor: Largo Resources Ltd., the only pure-play producer of vanadium with its world-class Maracás Menchen Mine. The Canadian company enjoys a market capitalization of $871 million CAD as it owns an exceptionally high-grade vanadium resources with a long mine life. With average head grades of 1.15% V2O5 in pit reserves, the deposit has one of the world‘s highest grades with very low levels of contaminants, like silica.
With $4.15 USD/lb V2O5 in annual average operating cash costs, the Maracás Menchen Mine is the world‘s second lowest cost vanadium producer, with high profit margins as the market price for V2O5 is near $20 USD/lb.
The 3,900 t/day open-pit and the on-site processing facilities are projected to produce up to 10,000 t (around 20 million lbs) of vanadium pentoxide (V2O5) in 2018, with Glencore having agreed to take 100% of the high-purity V2O5 flake and powder output.
With 19 million t in proven and probable reserves reserve, translating into 10 years of mine life, the current measured and indicated resources of around 20 million t are set to double mine life.
It‘s also quite impressive how fast Largo went into production: Mine construction began in June 2012 and initial production of vanadium flake commenced in August 2014.
Full size / The Maracás Menchen Mine in the state of Bahia, Brazil. (Source: Largo Resources Ltd.)
Mark Smith, President & CEO of Largo, said the following in a 2016 interview:
“The Largo resource is absolutely world-class in nature. That’s the reason why all this can happen; why this is such a special project. It‘s big. It‘s very rich. We‘re 2 to 3 times richer than the next best primary vanadium mine in the world today. The high ore grade flows through everything we do. We end up with higher quality concentrate. We end up with very good recoveries in our processing system. The quality of the product we‘re producing is probably one of the best in the world right now. That really opens up some new doors in terms of where our material can be used and the margins that we can expect.“
Full size / Cost advantage of the Maracás Menchen Mine from Largo Resources Ltd.
Most interestingly for Maxtech, the entire strike length of the Maracás Menchen Mine Property is rich in vanadium, hosting many deposits of vanadium-rich titaniferous magnetite mineralization particularly at the Campbell Pitt and other smaller deposits such as Gulcari B, Nova Amparo and Sao Jose. Thus, the chances of finding more vanadium-rich deposits on Maxtech‘s newly acquired properties are high. According to Largo, “substantial regional growth to feed the Maracás Menchen Mine for the long term“ exists.
Peter Wilson, CEO of Maxtech, commented today:
“The new generation of batteries being manufactured are establishing manganese and vanadium as the strategic tech-minerals of the future. The vanadium mineralization observed and successfully mined in the area by Largo Resources and our current operations in Brazil, made Bahia a logical step for Maxtech. We look forward to acquiring additional claims with potential vanadium mineralization in other jurisdictions as well.“
At Tesla‘s shareholder meeting in June 2018, Elon Musk said:
“The rate of stationary storage is going to grow exponentially. For many years to come each incremental year will be about as much as all of the preceding years, which is a crazy, crazy growth rate.“
The vanadium battery market may lack a flashy promoter like Elon Musk, but nonetheless vanadium batteries already have 2 major backers who bet big on the future of vanadium batteries: Glencore, the world‘s biggest commodity trader with vanadium mines in Brazil and South Africa. And then there is Robert Friedland, the renowned billionaire and legendary mining magnate who controls VRB Energy, a fast-growing Canadian vanadium redox battery (“VRB“) technology developer and manufacturer, who proclaimed:
”Vanadium flow batteries are revolutionizing modern electricity grids in the way that lithium-ion batteries are enabling the global transition to electric vehicles.“
Rockstone is looking forward to covering Maxtech‘s strategy of growing and advancing its impressive portfolio focused on the tech metals sector. As the initiating coverage revealed, Maxtech‘s management team has strong ties to the mining industry and, within short time, has established a compelling network of key strategic partners for its manganese projects in Brazil and Zambia to advance to the next level.
Lithium versus Vanadium
“Lithium batteries are now common place in your phone or notebook. They are self-contained, storing their energy in cells that get hot. Vanadium flow batteries on the other hand, store their energy in tanks. Doubling the size of a lithium system doubles the price, according to Renewable Energy World, while with vanadium you just build a bigger tank and the cost per kilowatt hour goes down. Vanadium Redox batteries can be charged and discharged 35,000 times and could have a 35 year lifetime, while lithium batteries last around 3 to 5 years.“ (Source: IG Markets Ltd.)
“Flow batteries may offer a superior alternative to lithium ion technology for stationary grid support energy storage. Lithium ion batteries are capturing an increasing share of power grid support applications. Obviously, flow batteries are large in size and require pumps and electrolyte holding tanks. Thus, they are used primarily for stationary applications. They are particularly effective for load leveling and frequency control in electric power grids when batteries with both high power and high capacity are required. Flow batteries are capable of many thousands of charge and discharge cycles (higher than lithium ion). They also are capable of sitting unused for many months before starting with little or no preparation and, unlike lithium ion batteries, can be discharged 100% without damage. Numerous utility-scale projects are underway worldwide using flow batteries of various types in full and micro-grid configurations, particularly with renewable power generation.“ (Source: DesignNews)
“The global renewable energy sector is experiencing unprecedented growth due to sharp reductions in the cost of wind and solar power generation and enhanced policy efforts by governments worldwide. For example, the cost of building utility-scale solar power plants has fallen by 50% in the past five years. The International Energy Agency projects that renewables will remain the fastest-growing source of electricity generation, with their share growing to 28% in 2021 from 23% in 2015. Electricity generated by wind and solar varies throughout the day, depending on local resource conditions. These fluctuations mean that balancing is required in the system in order for electricity generation to meet consumption on a consistent basis. Energy storage provides fast-responding balancing to the grid, improving frequency and voltage, meeting peak demand spikes, and firming wind and solar output. The vanadium flow battery, also known as the vanadium redox battery, is a grid-scale storage technology that is ideal for supporting this growth in renewables... While lithium-based batteries are well suited to consumer electronics and electric vehicles, their lifetimes can be limited.“ (Source: VRB Energy)
Maxtech Ventures Inc.
#702 - 595 Howe Street
Vancouver, BC, V6C 2T5 Canada
Phone: +1 604 484 8989
Shares Issued & Outstanding: 54,314,862
Canadian Symbol (CSE): MVT
Current Price: $0.195 CAD (07/20/2018)
Market Capitalization: $11 Million CAD
German Symbol / WKN (Frankfurt): M1NA / A1W3JE
Current Price: €0.11 EUR (07/20/2018)
Market Capitalization: €6 Million EUR
Disclaimer: This report contains forward-looking information or forward-looking statements (collectively "forward-looking information") within the meaning of applicable securities laws. Forward-looking information is typically identified by words such as: "believe", "expect", "anticipate", "intend", "estimate", "potentially" and similar expressions, or are those, which, by their nature, refer to future events. Rockstone Research and Maxtech Ventures Inc. cautions investors that any forward-looking information provided herein is not a guarantee of future results or performance, and that actual results may differ materially from those in forward-looking information as a result of various factors. The reader is referred to the Maxtech´s public filings for a more complete discussion of such risk factors and their potential effects which may be accessed through the Maxtech´s profile on SEDAR at www.sedar.com. Please read the full disclaimer within the full research report as a PDF (here) as fundamental risks and conflicts of interest exist. The author, Stephan Bogner, holds does not hold shares or any other interest in Maxtech Ventures Inc., but may initiate a long position shortly, and is being paid a monthly retainer from Zimtu Capital Corp., which company also holds a long position in Maxtech Ventures Inc.