Neometals is set to increase its ownership of the Vanadium Recovery Project’s (VRP1) incorporated joint venture vehicle, Recycling Industries Scandinavia AB (RISAB), to 72.5%.

Critical Metals Ltd, via its subsidiary, will move from 50% to 27.5% ownership of RISAB, which is advancing engineering, procurement, equity, and project financing activities to enable consideration of an investment decision by 30 June 2023.

Last month, Neometals announced improved economics VRP1, following the completion of a feasibility study. The feasibility study has highlighted a 40% increase in the project’s projected pre-tax NPV, which is now estimated at US$323M, compared with the figures estimated in the PFS.

Neometals has a collaboration agreement with unlisted Scandinavian mineral development company Critical Metals to jointly evaluate the feasibility of constructing a recycling facility to recover and process high-grade vanadium pentoxide from vanadium-bearing steel by-products in Scandinavia. The plant will be located in Pori, Finland.

RISAB has a 10-year slag supply agreement with Scandinavian steel giant SSAB to access approximately 2Mt of stockpiled high-grade vanadium-bearing slag from three operating steel mills. These are in Oxelösund and Luleå in Sweden and Raahe in Finland. The SSAB stockpile in Luleå is ~4% V2O5 and at both Oxelösund and Raahe is ~3% V2O5. RISAB also has the first right to purchase additional volumes of slag obtained by SSAB above 2Mt on an as-available basis at agreed prices linked to product grade and the prevailing FeV80 vanadium price.

The feasibility study envisages a 300ktpy plant (throughput rate) with capacity of 8,665tpy vanadium pentoxide. CAPEX is an estimated US$314.4M with OPEX put at US$4.19/lb. This would put the operation in the lowest quartile. The feasibility study assumes an average selling price of US$9.82/lb V2O5 plus a purity ‘premium’ of US$1.84/lb for 99.5% purity on product from 2027.

Project Blue expects the vanadium market to grow at a CAGR of 4.7% over the 2022-2028 period. Over the five-year horizon, demand in steel is set to increase, supported by HSLA output and higher intensity of vanadium use. Meanwhile, our base case assumes the continued commercialisation of vanadium redox flow batteries. Our current projection is for 35%py growth to 2028, with demand to be driven by China.

Project Blue’s expectation is that the market could almost be supported by existing assets over the next three years, but that ultimately new sources of supply will be required after the middle of the decade. This new supply will come from primary, secondary or co-producers, with both existing players and new operators looking to bring new projects into production.

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