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The latest Armchair Trader podcast is now live. We spoke to Vincent Algar, CEO of Australian Vanadium, about the vanadium market and its importance for the development of industrial level electricity storage. We are big fans of the coming alternative energy revolution, and identifying companies that stand to benefit from this, and those in the vanadium sector are especially well placed.

Vincent was kind enough to run through many of the macro and technical factors surrounding the use of vanadium, including as a traditional ingredient in steel manufacture but also as part of larger scale batteries that can store energy for whole complexes like hospitals, schools and small villages. Generation of clean power is one thing, but storing it for when you need it, especially when coal and oil fired power stations are taken offline, well that’s something else.

Vincent is a geologist who has been working in the mining industry for over 25 years. In a previous life he was involved in the floatation of Shaw River Manganese and more recently was pivotal to the Otjo River Manganese project.

The Australian Vanadium Project

Australian Vanadium has a number of mining assets, including the Australian Vanadium Project, one of the highest grade vanadium projects currently being developed in the world, and considered a strategic asset by Western Australia. It was given State Lead Agency status in April, following on from its Major Project recognition by the Australian federal government in September. This means the project will be given government and state level assistance in a range of areas, including support from government agencies (e.g. Australia’s Department of Jobs, Tourism, Science and Innovation).

Vanadium is now regarded as a critical mineral by the Australian government and by other governments, including the UK and the EU.


The coming demand for vanadium

We see the coming demand for vanadium being powered by the roll out of clean energy across the global. While there is plenty of interest in the generation side of the equation – e.g. solar farms – there is less public focus on how this energy will be stored, especially if the sun is not shining or the wind is not blowing.

Flow batteries, also know as redox flow batteries, are an Australian invention which we discuss on the podcast. Such batteries are likely to play an important role in the capital cost of energy storage, due to their density and life span. It is an area of technology that utilities around the world are taking more of an interest in.

Demand for these batteries is already picking up. We saw Invinity Energy Systems (AIM:IES) report last month that it has already received orders for 40 vanadium flow batteries since the start of the year. Utilities are already running trial projects. While it might be too bullish to describe vanadium as the next oil, the fast roll out of these batteries is going to place considerable demand on vanadium producers as well.

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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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