Largo Resources' Maracás Menchen mine, Brazil
Photo by: Largo Resources
TORONTO (miningweekly.com) – Canadian vanadium producer Largo Resources has entered into a nonbinding memorandum of understanding (MoU) for an offtake agreement with Massachusetts-based energy technology firm Vionx Energy.
The announcement lifted Largo’s TSX-V-listed stock by more than 4% to C$0.47 apiece on Monday.
The MoU set out the principal terms upon which Largo and Vionx, which develops, produces and sells vanadium-redox flow batteries (VRBs) for utility grid applications, will continue discussions that can lead to the supply by Largo of vanadium electrolyte to Vionx to further the research and development of advanced VRBs using VNX grid energy storage systems.
"This is a historic first step in establishing the first partnership between a VRB company and a global vanadium producer. We are extremely excited about this opportunity and the industry-leading value proposition that it presents. We are equally excited about joining the world-class ecosystem of Vionx partners including United Technologies, Siemens, 3M and Jabil,” commented Largo president and CEO Mark Smith.
Largo and Vionx had agreed to continue discussions aimed at achieving stable pricing and necessary capacity with an industry-leading value proposition for VRB systems, using Vionx's product, technical, cost and partner advantages, combined with Largo's supply capacity, cost advantages and high-quality processing capability.
Should the companies strike a definite offtake agreement, Largo’s current offtake partner, Glencore, would have to give its consent.
Vionx would also become Largo's partner for cooperative sales of vanadium products in the utility grid market, and would also see Vionx agreeing to use Largo vanadium electrolyte in its VRB systems.
"Our partnership with Largo represents the first of its kind in the VRB industry and we are thrilled to be at the leading edge of a transformative phase for the energy storage industry,” stated Vionx president and CEO David Vieau.
Largo recently achieved a new production record at its flagship Maracás Menchen vanadium mine, in Bahia, Brazil. The operation is moving closer towards achieving nameplate capacity with the project expected to produce on average 11 400 t/y of vanadium equivalent over a 29-year mine life.