Vanadium

Allison Britt (allison.britt@ga.gov.au)

Vanadium (V) is a soft, ductile, silver-grey metal that is used primarily with iron to make metal alloys for high-strength steel production. High-strength steel has a wide range of applications, including for gas and oil pipelines, tool steel, jet engines, the manufacture of axles and crankshafts for motor vehicles, as well as for reinforcing bars in building and construction.

Vanadium is also used in the production of ceramics and electronics, textile dyes, fertilisers, synthetic rubber, in welding, as well as in alloys used in nuclear engineering and superconductors. Vanadium chemicals and catalysts are used in the manufacture of sulphuric acid, the desulphurisation of sour gas and oil and in the development of fuel cells and low-charge-time, light-weight batteries.

Vanadium is not found in its metallic form in nature but occurs in more than 60 minerals as a trace element in a number of different rock types. It occurs most commonly in titaniferous magnetite deposits and in uraniferous sandstone and siltstone, as well as bauxites and phosphorites. It also occurs in fossil fuel deposits such as crude oil, coal and tar sands. It is produced as both a primary product and co-product from mining and most commonly as co-products or by-products of steel making. It is also recovered from wastes such as fly ash, oil residues and waste solutions from the processing of uranium ores.

Nearly all of the world's vanadium is derived from mined ore as either direct mineral concentrates, usually vanadium- and titanium-rich magnetite, or as a by-product of steel-making slags. The United States Geological Survey (USGS) estimates that almost 70% of annual supply is recovered from slags and about 30% directly mined, with the remainder being acquired from other sources. Japan and the United States are thought to be the only countries to recover significant quantities of vanadium from petroleum residues.

Vanadium is sold as vanadium pentoxide (V2O5) and less commonly as vanadium trioxide (V2O5) for non-steel applications and as the alloy ferrovanadium (FeV) for steel making. The most common FeV alloy is FeV80, but FeV40, FeV50 and FeV60 are also sold. The numeric part of the symbol refers to the amount of contained vanadium; for example, FeV80 has approximately 80% contained vanadium.

Trade in vanadium products tends to be opaque with no central market recording prices. Various trade sheets such as the Metal Pages, Ryan's Notes and the London Metal Bulletin record propriety information for subscribers. Sourcing Ryan's Notes, the USGS states that in 2011 the average price for FeV in North America ranged from US$14.606 to US$15.004 per pound (lb) of vanadium content, compared to US$14.155 to US$14.688/lb in 2010. In 2011, the European average price for FeV, ranged from US$28.533 to US$29.273 per kilogram (kg), compared to US$29.811 to US$30.817/kg in 2010. Average prices in 2012 to 30 September for FeV have ranged from US$32.14 to US$32.45/kg in the North American market and US$24.45 to US$25.53/kg in European markets. The USGS also reports the Ryan's Notes annual average price for V2O5 in the United States ranged from US$6.563 to US$6.960/lb in 2011, compared with US$6.285 to US$6.636/lb in 2010. Ferrovanadium has a price premium over V2O5.

Historically, vanadium prices have fluctuated over the past decade with sharp rises and equally sharp declines over short periods. For example, following the global financial crisis, FeV prices reached lows of US$16.30 and US$17.50/kg in May 2009 in North America and Europe, respectively, after reaching heights of about US$101.40 and US$93.00/kg, respectively, the previous year.

Resources

Australia's Economic Demonstrated Resources (EDR) of vanadium decreased by 14% in 2011 to 1519 kilotonnes (kt) from 1762 kt in 2010 as a result of a reassessment of the Gabanintha deposit in Western Australia (WA) by Yellow Rock Resources Ltd.

Historically, Australia's EDR of vanadium have fluctuated because of the economic impacts of volatile prices and the nature of the vanadium market, which is supplied largely from secondary sources, particularly the reprocessing of slags from iron smelting. These secondary sources are able to rapidly increase or decrease output in response to price trends.

Accessible EDR

All of Australia's EDR of vanadium are accessible.

JORC Reserves

In 2011, Joint Ore Reserve Committee (JORC) Code Reserves in the Proved and Probable Reserve categories comprised 1230 kt of vanadium compared with 1172 kt in 2010. This accounts for approximately 81% of accessible EDR. The remaining 19% of EDR comprises Measured and Indicated Resources.

World Ranking

The USGS estimates that world economic resources of vanadium are about 15 million tonnes (Mt) but total world resources exceed 63 Mt. China and Russia each hold about 8% of the world's vanadium resources, followed by South Africa with 6%. Australia's EDR of 1.519 Mt represents approximately 2.5% of the world's vanadium resources. However, because vanadium can be recovered as a by-product or a co-product of steel slags, the estimated world resources are not fully indicative of available supply. At current usage, there are sufficient resources to meet the world's vanadium needs into the next century.

The USGS estimates that world production of vanadium from all sources in 2011 totalled 62.4 Mt compared to 62.2 Mt in 2010, with China producing 23 Mt, South Africa 22 Mt and Russia 15 Mt.

Exploration

Data on exploration expenditure for vanadium are not available in published statistics. However, during 2011, exploration or resource drilling was undertaken at Speewah in WA with approximately 13 000 m of reverse circulation (RC) drilling and 5000 m of diamond drilling, while at Hawkwood in Queensland (Qld) there was 637 m of diamond drilling following the 2010 RC-drilling campaign. More recently, a 7000 m diamond and RC drilling program commenced in November 2012 at Mount Peake in the Northern Territory (NT). Geochemical and geophysical surveys were undertaken in WA at Gabanintha in 2011 and 2012 and at Canegrass in late 2011. Exploration of the southern tenements at Windimurra in WA confirmed the potential for replenishing the reserves at this mine.

Production

There was no production of vanadium in Australia during 2011. However, Atlantic Ltd's Windimurra mine produced vanadium and high-titanium hematite fines (iron ore) in 2012. The company's first shipment of seven tonnes of FeV occurred at the end of May and by the end of September it had transported another 38 tonnes to its Perth warehouse.

Most of the world's reported mine production of vanadium during 2011 was in China (38%), South Africa (33%) and Russia (25%).

Industry Developments

Windimurra (WA): The Windimurra mine, operated by Atlantic Ltd, is the only producing vanadium mine in Australia. It started producing in January 2012 and by the end of September the company had transported some 45 tonnes of ferrovanadium to its Perth warehouse. Improvements in the mine processing plant are expected to enable production to increase significantly with the company planning to produce 6300 tonnes per annum of vanadium once the mine and plant are fully operational. The projected mine life for Windimurra is approximately 28 years.

In 2011, the Windimurra deposit contained 20% of Australia's total EDR of vanadium. In May 2011, Atlantic Ltd published a Proven and Probable Reserve of 127.6 Mt at 0.47% V2O5 for the Windimurra vanadium project. A more recent Measured, Indicated and Inferred Resource of 242.6 Mt at 0.48% V2O5, representing 654 000 tonnes of contained vanadium, was published in April 2012.

The mine also has potential to produce hematite fines as a by-product of FeV processing. Significant stockpiles of hematite fines remain at the mine site, leftover from the previous Xstrata operation that ran for three years until the mine closed in 2004. Windimurra's iron-ore fines also possess a high titanium grade, leading the company to successfully test for the optimal processing flow for separating the iron and titanium dioxide from the ore. This work was done in conjunction with the Changsha Research Institute of Mining and Metallurgy in China at both laboratory and process scale and confirmed that separation of the iron-ore fines is a viable business opportunity for the Windimurra operation.

Speewah (WA): During 2011, Speewah Metals Ltd drilled 266 holes for more than 18 000 m at the Speewah titanium-vanadium-iron deposit. The company completed hydrometallurgical testwork in February that confirmed a mixed chloride leaching process could be used to extract the titanium, vanadium and hematite. In March 2012, the company released a new JORC Code compliant resource for the deposit of 4712 Mt at 0.3% V2O5, 2.0% titanium (Ti) and 14.7% iron (Fe), an increase of 32% over the previous resource estimate. In April 2012, the company completed a scoping study and, in May 2012, signed a Memorandum of Understanding (MoU) with the traditional owners of the land. In September 2012, the company suspended activities at Speewah, citing limited funding and an unfavourable outlook for financing.

Balla Balla (WA): In December 2011, Atlas Iron signed a binding agreement to sell its Balla Balla vanadium-magnetite-titanium project to Forge Resources Ltd. Subsequently, Forge Resources formed a joint venture with a New Zealand private equity company, Todd Capital, and the mine was sold in May 2012 for $40 million. A Definitive Feasibility Study (DFS) was completed in February 2010 which concluded that the project is economic. Total resources are currently 456 Mt at 45% Fe, 0.64% V2O5 and 13.7% TiO2. Forge Resources is currently revising the DFS, exploring trans-shipment export paths, trialling products and seeking project finance.

Barrambi (WA): In June 2011, Reed Resources entered into a MoU with China Non-Ferrous Metal Industry's Foreign Engineering and Construction Company Ltd and Arccon (WA) Pty Ltd for the development of the Barrambi Vanadium Project. However, by September 2011 the companies suspended the MoU citing weak market conditions for vanadium. Since then, Reed Resources has been conducting laboratory-scale testwork on the Eastern Band magnetic concentrates from the Barrambi iron-titanium-vanadium deposit with plans for a mini-plant (150 kg) testwork program. Current resources total 65.2 Mt at 0.82% V2O5 and 17.3% TiO2.

Gabanintha (WA): Yellow Rock Resources Ltd released a new resource estimate in February 2011 for the Gabanintha titanium-vanadium-magnetite project with higher grades but reduced tonnage. Indicated and Inferred Resources have decreased from 151.5 Mt to 125.8 Mt at 0.7% V2O5, 8.6% TiO2 and 32% Fe. The company undertook a comprehensive geochemical soil sampling program, which was completed in December 2011, and a helicopter-borne geophysical survey completed in July 2012.

Canegrass (WA): Flinders Mines Ltd released an Inferred Resource statement in August 2011 for the Canegrass magnetite project of 107 Mt at 0.6% V2O5, 5.8% TiO2 and 29% Fe.

Unaly Hill (WA): In November 2011, Black Ridge Mining NL announced a maiden Inferred Resource for the Unaly Hill vanadium-titanium-magnetite project of 86.2Mt at 0.4% V2O5, 4.5% TiO2 and 24% Fe.

Victory Bore (WA): In March 2011, Quest Minerals Ltd announced a maiden Inferred Resource for the Victory Bore vanadium-magnetite-titanium deposit of 151 Mt at 0.4% V2O5, 6.7% TiO2 and 25% Fe. Results from a subsequent metallurgical scoping study released in January 2012 indicate that the ore is amenable to standard processing with a high recovery of vanadium. However, results from the July 2012 mining scoping study show that capital costs are the major factor in determining the project economics.

Mount Peake (NT): In February 2011, TNG Ltd completed a Scoping Study of the Mount Peake vanadium-titanium-magnetite project that indicated a potential mine could produce approximately 107 Mt of ore over 24 years. The company subsequently commissioned another scoping study on the potential of producing FeV at a downstream plant. In October 2011, TNG released an updated JORC Code Resources statement of 158 Mt at 0.28% V2O5, 5.06 % TiO2 and 22% Fe for the Mount Peake project. Activities in 2012 included the release of a pre-feasibility study in July and the start of a 7000 m diamond and RC-drilling program in November.

Julia Creek (Qld): In June 2011, Intermin Resources Ltd reported a total resource of 5308 Mt at 0.37% V2O5 and 312 grams per tonne molybdenum. The company also carried out metallurgical testwork and has a feasibility study in progress. However, progress on this project is hampered by the Queensland Government's moratorium on oil shale mining, which affects the Julia Creek vanadium-molybdenum project as it is hosted by calcareous oil shales in the Toolebuc Formation.

Hawkwood (Qld): During 2011, Eastern Iron Ltd drilled three diamond drill holes into the Hawkwood orebody and sent the core for Davis Tube analysis. In May 2012, the company released a maiden Inferred Resource statement for the Hawkwood Iron Project of 103.7 Mt at 64.6% Fe, 1.83% TiO2 and 0.05% V. Davis Tube concentrates gave results of 66.6% Fe, 2.2% TiO2 and 0.67% V2O5.