Australian Vanadium signs MOU with US company for supply of high-purity vanadium oxides for production in Australia

Australian Vanadium Ltd (ASX:AVL) has signed a Memorandum of Understanding (MOU) with specialty chemical producer US Vanadium LLC (USV) for the supply of high-purity vanadium oxides and a licence for vanadium electrolyte production. This agreement will allow AVL to begin local vanadium electrolyte production to support growing interest in the emerging Australian VRFB market. The company has also recently been awarded a $3.69 million grant through the Australian Government’s Modern Manufacturing Initiative (MMI) to develop a high purity vanadium production circuit, build and operate a 33MWh capacity vanadium electrolyte plant and produce locally assembled prototype VRFB systems for domestic and standalone remote power systems. This MOU complements the one already signed with USV regarding future offtake of vanadium from the Australian Vanadium Project, for use in the US critical metals market. Both MOUs will lead to a binding mutual vanadium supply and technology licence agreement between the two companies. Strong position to secure financing AVL managing director Vincent Algar said: “Having a strong relationship with a company of USV’s calibre in the vanadium market enables AVL to secure a supply of the highest quality vanadium oxides, prior to bringing the Australian Vanadium Project into production. “This will allow us to move quickly to build a vanadium electrolyte plant here in Australia to supply the growing VRFB market and the plant will be partially funded by the recently announced award of the MMI grant by the Federal Government. This vertical integration strategy puts AVL in a strong position to secure financing for the project and provides Australian employment opportunities in the downstream battery supply chain.” USV will grant AVL the exclusive use of its vanadium electrolyte technology in Australia and New Zealand, which will allow AVL to use either USV or its own vanadium products when available. The USV technology and expertise has a track record for being a low-cost method of production of balanced electrolyte, suitable for a wide range of VRFB manufacturers’ specifications and USV will provide technical support for the first two years at no cost to AVL, followed by technical support being available from USV at cost. Partnership “makes a lot of sense” The agreement terminates if AVL has not built a vanadium electrolyte plant within 24 months. The licence will continue for a period of five years and AVL will purchase vanadium pentoxide to manufacture the vanadium electrolyte using a pricing formula based on the Metal Bulletin Monthly Midpoint Average with a floor and ceiling included. US Vanadium chief executive officer Mark Smith said: “Partnering with AVL in order to serve the Australian market makes a lot of sense for US Vanadium and we look forward to working with AVL toward these goals.”