The World Needs Vanadium for Clean Energy, and Energizer Has It in Madagascar
By Kevin Michael Grace
Energizer Resources Inc wants to be in the battery business. No, not the batteries advertised by the bunny that keeps on going, the batteries you put in your camera or cell phone. That’s a different company. Energizer is a Toronto-headquartered company that has in Madagascar the world’s third-largest known deposit of vanadium, the mineral used to fuel the batteries synonymous with clean energy.
Vanadium already plays an important role in our lives. As Vice President of Business Development Brent Nykoliation says, “Much of what we use and touch on a daily basis contains vanadium: the buildings we work in, the tools we use, the cars, trains and planes we travel in.”
About 98% of world vanadium production comes from just three countries: China (37%), South Africa (35%) and Russia (26%). Up to 97% of this is used as an alloying agent to strengthen steel for such products as rebar, car axles and jet hulls and engines. Even without considering usage for batteries, about 1%, vanadium is not exactly plentiful. Nykoliation reports, “Vanadium demand for steel has been growing 7% annually for the last three years and is projected to do so for at least the next five to seven years. Supply is growing only about 3% to 5% annually. Industry analysts predict we’re facing a potential shortage of vanadium based on steel usage alone as early as 2013, driven by the incredible consumption of steel by China and India.”
President Barack Obama made clean energy a focus of his State of the Union address, mentioning it no less than four times and declaring that “providing incentives” for its use is “the right thing to do for our future.” According to Nykoliation, “Projections from analysts are that vanadium consumption for batteries could be as much as 25% of total production within three to five years. A year ago you had to Google vanadium, and now people are reading about how it’s impacting the world.”
Consumption will be driven by two innovations: the lithium-vanadium-phosphate car battery and the vanadium redox flow battery for large-scale energy storage. Adding vanadium to lithium-ion batteries makes them cooler and safer, more powerful and longer lasting. This means electric cars with greater range and fewer rechargings. Vanadium redox flow batteries ameliorate a profound difficulty with solar and wind power. To put it bluntly, they’re not much good when the sun isn’t shining or the wind isn’t blowing.
Nykoliation reports, “Vanadium redox batteries operate at room temperature and can rapidly charge and discharge simultaneously. This allows them to be one of the only clean energy technologies that can connect to today’s legacy grid and to tomorrow’s smart grid. They’re modular. You can keep adding them and end up with kilowatt hours all the way to megawatt class.”
A year ago you had to Google vanadium, and now people are reading about how it’s impacting the world – Brent Nykoliation
The upshot is that all this renewable energy requires a lot of vanadium, which is not a renewable resource. Nykoliation: “If you have one million electric vehicles that contain lithium-vanadium-phosphate batteries on the road, that would take 25,000 tonnes of vanadium, or 23% of current world supply. Fifty thousand large-scale vanadium redox batteries (400 kilowatt hours) would require 250,000 tonnes of vanadium, more than twice world supply.”
So the world needs much more vanadium. This is where Energizer comes in. A January 2011 43-101 technical report estimates its Madagascar Green Giant Project to contain an indicated resource of 49.5 million tonnes at an average grade of 0.693% vanadium pentoxide (V205) and an inferred resource of 9.7 million tonnes at an average grade of 0.632% V205. (Or 756.5 million pounds indicated, 134.5 million pounds inferred.) Even better, Nykoliation notes, “We have a 21-kilometre vanadium trend, and we’ve drilled only 25% of that. That’s a lot of blue sky.”
Best of all, “There are very few vanadium projects expected to come on line: only two or three in the next 10 years. Of those, we’re the only one that’s significant and producing vanadium pentoxide. Only 5% or less of vanadium occurrences in the world are sediment-hosted V205. The rest of them are magnetite hosted.” This is crucial because magnetite-hosted vanadium is no good for batteries.
Madagascar, home of the Green Giant deposit, is the world’s fourth-largest island, located in the Indian Ocean due east of Mozambique. In recent years it has seen considerable political turmoil and protests against mineral companies such as Rio Tinto. Its current president is ineligible to hold office, according to the constitution. As a result, his regime is not recognized by the World Bank and the African Union.
As troublesome as that sounds, there are no indications the Green Giant Project will be affected. Rio Tinto’s operations are in the rainforest, while Energizer’s are in the savannah, which is devoid of at-risk flora and fauna. Madagascar’s mining act has strong protections for foreign companies, and with the collapse of the tourism industry, Madagascar needs foreign investment more than ever, as demonstrated by its government’s recent talks with China.
In any event, there is hardly a jurisdiction on earth free from potential problems. This is true even of Canada, where mining companies have suffered expropriations for environmental reasons and have been bedeviled by continuing consultations with Indian bands.
Pending feasibility studies, Green Giant is scheduled to begin production in 2014. Nykoliation concludes, “We expect to supply 13% to 14% of the world’s vanadium: enough to meet the needed increases in the steel market and the upcoming demand in the battery market. Right now vanadium is volatile in price. We’ve seen it go anywhere from $5 all the way up to $37 in a year. We are positioned to be the only mining operation capable of economically supplying battery-grade V205, while at the same time bringing the necessary stability of supply and price to the vanadium market.”