Photo by: Bloomberg
PERTH (miningweekly.com) – Critical minerals company Neometals on Wednesday announced the signing of a binding offtake agreement between the developer of the Vanadium Recovery Project (VRP1) and major Glencore.
Neometals, which holds a 72.5% interest in Recycling Industries Scandinavia AB (RISAB) and is developing VRP1 with Critical Metals, said that the offtake agreement would cover all of the vanadium products produced at VRP1.
Under the terms of the agreement, RISAB subsidiary Novana will exclusively sell and deliver all saleable vanadium-bearing products to Glencore over an initial five-year period from the start of production, which will automatically extend in two-year increments unless the parties elect not to renew the offtake agreement.
The delivery period is expected to start in January 2026 or an earlier date, if notified to Glencore with 12-months’ notice. The price paid for the vanadium will be tied to the prevailing market prices.
“Securing take or pay offtake for 100% of VRP1 vanadium products represents a significant milestone as we progress towards a final investment decision this quarter,” said Neometals MD Chris Reed.
“Removing volume risk on offtake is seen as a key requirement for securing project finance and we have mitigated this risk with the take or pay nature of our offtake agreement with a Tier 1 counterparty in Glencore. The offtake agreement further emphasises the anticipated future need for high-purity material in the market. This is supported by significant expected demand from the vanadium redox flow battery sector and other potential high purity applications.”
A feasibility study into VRP1 has estimated the production of 19.1-million pounds of vanadium a year, based on a throughput rate of 300 000 t/y. The feasibility study estimated a capital cost of $314.4-million, with the net operating cost estimated at $4.19/lb.