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It is already being described as the new gold rush, and this year could really be the proving ground for the small batch of companies that are positioning themselves in the race to control the flow of battery metals.

With many investors still focused on the fortunes of EV manufacturers like Tesla, other investors have already taken the logical steps up the supply chain, asking the question ‘what will be needed to go into these batteries?’

Vanadium flow battery investment is red hot

Vanadium flow batteries are going to be a major area of investment and innovation going forward, with many experts now touting the technology as essential if the growing flow of electricity from renewable energy sources is to be properly harnessed. The market sat up and took notice when legendary mining investor Robert Friedland backed privately-held VRB Energy, which this week said it would be involved in the construction of a 100 MW solar photovoltaic (PV) and 100 MW vanadium flow battery integrated power station project in China’s Hubei province.

Friedland and VRB Energy will also be supporting the establishment of a vanadium flow battery energy research and development institute.

“China wants to install over 1,000 gigawatts (GW) of new solar PV and wind power by 2030 and they are not alone in the commitment to decarbonization and the ‘greening’ of their power grids; with both the U.S. and the European Union prioritizing renewable power solutions,” Friedland said this week. “Energy storage remains a key challenge in the mass adoption of renewable energy, and we’re extremely proud to be leading the way in creating cutting-edge solutions at VRB.”

Beyond China, VRB Energy has stated it is in discussions with numerous developers and utilities in the U.S., Australia and South Africa for 100MW-class PV+VRB projects.

Developers and utilities are attracted to the low levelized cost of energy (LCOE) that VRB-ESS delivers – with no cycle limits and no degradation of the vanadium electrolyte they are an ideal fit for the “heavy duty” daily cycling required for solar and wind integration to utility grids.

$300m SPAC lists in New York to invest in vanadium opportunities

Elsewhere, Sir Mick Davis, former head of Xstrata, has set up a battery metals investment firm called Vision Blue Resources. He floated a $300m SPAC (special purpose acquisition company) called ESM Acquisition Corp in New York last week. Its mission is to hunt for and invest in mining projects that are focused on the minerals needed for the aforementioned EV batteries. Davis’ Vision Blue will be hunting out small mining projects in the space, whereas ESM will be on the trail of the bigger investments.

Vision Blue Resources has also invested $11.5m in London-listed Ferro-Alloy Resources (LSE:FAR) which is developing the Balasausqandiq vanadium project in Kazakhstan. Davis will be appointed to the board of FAR as chairman. This project has the potential to become one of the largest and cheapest vanadium mines in the world.

We can’t help thinking that this activity feels like the early days of the oil industry literally 100 years ago. This time, however, it is going to be the battery metals sector rather than the oil sector which is going to be making investors millions.

“The strong investment case for vanadium is clear not only from a steel demand perspective, but even more when considering the huge potential for vanadium redox batteries to play an integral role in the establishment of reliable ‘base-load’ renewable energy, capable of reducing the world’s reliance on fossil fuels.,” Davis said.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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This Post Has 2 Comments

  1. Surprised you are not tipping Bushveld minerals ltd given your headline. Suggest you gen up on it by reading The Bushveld Perspective. Google it

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