PERTH (miningweekly.com) – An engineering cost study on the recovery of high-purity vanadium pentoxide from high-grade vanadium-bearing steel by-product has proven positive for ASX-listed Neometals.

Neometals in 2020 entered into an option agreement to form a joint venture (JV) to develop a vanadium recovery project with unlisted Australian mineral development company Critical Metals.

The parties are jointly evaluating the feasibility of constructing a facility in Finland, to process and recover high-purity vanadium pentoxide from vanadium-bearing steel-making by-product generated by SSAB EMEA AB and SSAB Europe Oy in Scandinavia.

The engineering cost study has estimated that the recovery project could support yearly production of 19.01-million pounds of vanadium pentoxide at a throughput rate of 300 000 t/y, at an initial capital cost of $341-million and an average net operating cost of $4.38/lb.

“Completion of the engineering cost study has provided additional confidence in the operating and capital costs of a vanadium recovery project. The teams have significantly reduced the technical risk of the project,” said Neometals MD Chris Reed.

“Combining this high-grade feedstock with our innovative process flowsheet can deliver very high purity, low-cost vanadium chemicals globally with a very low carbon footprint. Security of supply is a key issue in Europe. Vanadium has been on the list of critical raw materials since 2017 and Russia supplied the bulk of Europe’s vanadium feedstock in 2021. As Europe’s only advanced high purity vanadium development project, a vanadium recovery project is a strategically important asset.

“Notwithstanding a reduction in technical risk, Neometals is cognisant of the global economic and geopolitical outlook, the current state of financial markets and the fall in the vanadium price, which has increased the financial risk of the project,” Reed said.

Neometals will now explore a number of value engineering opportunities identified during the economic study and will finalise a feasibility study on the recovery project, with the JV partners to progress discussions with potential offtake and financing partners.

Neometals noted that critical to the project development would be progressing a formal agreement with SSAB and progressing a letter of intent with potential offtake partner Betolar into a formal offtake agreement of potential by-products.