LPV aims to offer “pure play” exposure to physical vanadium while also addressing the costs associated with using vanadium in VRFBs.

The update suggests that Column Capital has received conditional approval from the TSX Venture Exchange in respect of its qualifying transaction with LPV.  According to Largo President and CEO, Paulo Misk, this represents an important milestone for Largo, LPV and the vanadium sector.

LPV aims to provide an exchange-traded investment alternative for investors interested in having direct exposure to physical vanadium.  LPV will offer pure-play exposure to vanadium and will initially hold approximately 200t of vanadium pentoxide equivalent contributed by Largo in connection with the Qualifying Transaction, and further vanadium to be acquired with the proceeds of US$23M of subscription receipt financing that closed in April.

LPV will acquire and store vanadium units in commercial forms as well as in electrolyte solutions for VRFB applications due to the unique non-degradation characteristic of the metal.  Vanadium is non-degrading and fully recyclable when used as an electrolyte in VRFBs. 

This is what makes the investment vehicle interesting.  Largo is not simply offering “pure-play exposure” to some material in a warehouse – the material could be deployed in an active grid-scale battery.  LPV’s strategy is not only to achieve appreciation through the acquisition of vanadium but to own and actively supply vanadium to end users of VRFBs to advance to the integration of renewable energy in long-duration storage.  Largo considers this central to LPV’s business plan, as it necessarily defrays the costs associated with using vanadium in VRFBs through the unique non-degradation characteristics of the metal.

Project Blue expects to see continued commercialisation of vanadium redox batteries in its base case.   Our current projection is for >30%py growth to 2027, with demand to be driven by China – although it's difficult to know where these batteries will be installed.  It's also difficult to know where the supply of high-purity vanadium and electrolyte will come from.  Although large Chinese producers such as Pangang and HBIS Chengde are likely to increase their high-purity oxide and electrolyte production, we expect China to increasingly rely on vanadium electrolyte imports to meet its future requirements.