Vanadium batteries need Elon Musk moment to kick-start market

[SINGAPORE] Vanadium needs Elon Musk or another big player in the global battery market to get behind the metal in order to share centre stage with other energy-storage components such as lithium and cobalt.

"When we get that moment, we're off to the races," Vincent Algar, managing director of Australian Vanadium Ltd, said in an interview at a mining conference in Hong Kong.

The industry needs a Tesla Inc or Panasonic Corp to say "we like vanadium-flow batteries and we want to make them in addition to lithium-ion batteries," he said.

The world's biggest lithium-ion battery was installed in record time in Australia last year after billionaire Mr Musk successfully bet he could help solve an energy crisis in the Pacific nation by deploying his Tesla technology to plug a supply gap.

Vanadium, mainly used in steelmaking, can also be used in industrial-scale batteries, which help to even out daily peaks and troughs from renewables such as wind energy. The move to green energy could create a new market and start a scramble for supply, according to BMO Capital Markets.

Vanadium-flow batteries are robust, long-lasting, can operate in all temperatures and don't degrade internally, said Mr Algar, who wants to have at least 20 per cent of output from his company's Gabanintha project in Western Australia going into the battery market.

Inventories are decreasing and prices have been rising since mid-2016 because of surging demand from China, the world's biggest steel producer.

A pre-feasibility study is expected to be completed by mid-2018 and the company will start to look toward financing and construction of its plant in mid-2019 with a capex of A$350 million (S$354 million), according to Mr Algar. Production may begin early 2021, he said.

Australian Vanadium is looking to produce about 5,000 to 6,000 metric tons, which would account for about 5 per cent to 6 per cent of global market share, and just over 10,000 tons of vanadium pentoxide, a powder form of the metal, said Mr Algar.

The dominant form of energy storage is lithium-ion technology, but there are advantages to vanadium-flow batteries. They last longer and can be charged and discharged repeatedly without any significant drop in performance. They are also easy to recycle and good for projects where space isn't an issue.

Uptake of vanadium-flow batteries has been hampered by the cost of the material and maintenance as well as low-energy densities, requiring more space to store energy than some alternative chemistries, according to Bloomberg New Energy Finance.

There's still a struggle to get recognition for vanadium, Mr Algar said on April 6.

"Trying to sell a vanadium-flow battery to someone who only can think of lithium, who only thinks there's a lithium battery out there to solve the world's problems, very difficult."

BLOOMBERG