Last week, Shell & AMG Recycling (SARBV) and its partner, the United Company for Industry (UCI), announced the signing of an agreement with the Saudi Arabian Oil Company (Aramco) under which SARBV and UCI will construct and operate a Metals Reclamation Complex for the recovery and recycling of metals in Al-Jubail Industrial City, in Saudi Arabia.

In 2016, Saudi Arabia announced a program called Vision 2030.  One of the focuses of this program is economic diversification to broaden Saudi Arabia's export and income dependence away from oil and gas.  This agreement fits neatly with Vision 2030 ambitions to accelerate energy transition, achieve sustainability aspirations, and drive circular investment in the Kingdom.  It also aligns with the Aramco Namaat Industrial Investments Program initiative which aims to build national champions, create a robust industrial ecosystem, and introduce unique job opportunities.

The Metals Reclamation Complex seeks to enable the development of a world-class facility for processing refineries’ recyclable materials into valuable products.  The aim is to develop recycling capabilities through a regional hub for spent residue catalysts metals reclamation, and fresh residue upgrading catalyst manufacturing. 

The agreement aims to be the initial phase of a “supercenter” complex and focus on the processing of vanadium concentrate from the Jazan Integrated Gasification Combined Cycle Plant, licensed by Shell, to produce high-purity vanadium pentoxide.  Other priorities are the building of a research and development centre for testing a residue-upgrading catalyst, the installation of a lithium-vanadium battery, and the development of a vanadium electrolyte production plant to help the development of vanadium redox flow battery supply chains in the Kingdom. 

The outlook for secondary (recycled) vanadium supply is of key importance to future market balance, with the central question being – how much (additional) material should we expect from secondary sources? 

In January 2020, a new global cap by the International Maritime Organisation (IMO) on sulphur content in marine fuels came into effect.  Known as “IMO 2020”, the rule limits the sulphur in the fuel oil used on board ships operating outside designated emission control areas to 0.5% mass by mass, a significant reduction from the previous limit of 3.5%.  The regulation has led to growth in refinery catalyst consumption, which in turn implies a growth trend in vanadium-bearing spent catalysts available for recycling.  It is for this reason that AMG and others are expanding secondary capacity.      

There are several other key projects to monitor.  As well as this AMG’s new Zanesville Plant in the USA will have an estimated 34,000tpy of spent catalyst processing capability.  In addition, Gladieux is expected to (re-)start production in Freeport Texas in 2022, while Movan Industries is developing a 50,000tpy facility in Kuwait.  Project Blue sees secondary supply for vanadium growing at nearly 6%py in its base case.