The vanadium market shows significant upside opportunities and robust economies, which will benefit different sectors in the future, says Aim-listed Bushveld Minerals exploration manager Luke Longridge.

Speaking during the Geology Society of South Africa’s African Exploration Showcase last month, Longridge mentioned that urbanisation-driven infrastructure development in China and emerging economies, the construction share of steel consumption being over 50% and still expected to continue to grow, has meant that steel-specific vanadium consumption estimation will increase from 36% in 2011 to 45% in 2016.

“This estimated increase is driven by the Chinese government’s policy-driven shift to use high-strength rebar in its construction works. This will mean that there needs to be an increase of 31% vanadium intensity use in the steel sector. “This will also potentially create a demand of more than 30 000 t of new vanadium a year,” he stated.

In 2012, 166-million tons of Chinese rebar were produced, which comprised 86-million tons of Grade 2 (which has no vanadium content), 66-million tons of Grade 2 rebar (with 0.35 kg of vanadium in each ton) and 13.5-million tons of Grade 4 rebar (with 1 kg of vanadium in each ton).

With its policy shift to use high-strength rebar, Longridge mentioned that the Chinese steel sector will restrict and gradually eliminate the use of lower strength bars by 2015, which is expected to drive an increase in vanadium content in steel rebar.

Moreover, Longridge said that vanadium could also be used in energy storage, such as grid power management systems for load levelling, peak shaving and uninterrupted power supply. Also, this allows for mass storage of power, which allows intermittent power sources to supplement and add to grid power without disruptions.

“Vanadium is used in the form of vanadium redox flow batteries in the energy sector. These batteries have the capacity to store large quantities of power; have a life span of over 20 years, as they are able to charge and discharge repeatedly; possess a fast response time that allows for power to be released at the required time; have low self-discharge characteristics that allow them to store energy for a very long period of time without losing their charge; and are suitable to connect directly to the power grid,” he pointed out.

This growing recognition of the value of high-capacity storage systems in grid power management systems; the growing power costs that impose a greater need for capital efficiency in expanding existing or building new power generation capacity; as well as the growth of renewable-power generation, which requires significant power storage solutions for streamlining and integration with the grid, has meant that the demand for vanadium has increased.

As a result of these demand drivers, Longridge indicated that this creates an opportunity for major companies to form partnerships that would bring about positive business opportunities, as the demand for vanadium suggests multiple value add for different sectors.