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Vanadium Resources Limited: Leading Vanadium Producers

Mining is an incredibly rich industry in South Africa and as such has significant developments in gold and copper across the country. However, vanadium is a rare but hard element that is often found alongside minerals within crucial deposits in South Africa. The most common use of Vanadium is in the formation of alloys due to its corrosion-resistant nature. Therefore, mining this rare element has become a central exploration venture for the country, seeing key developments such as the Steelpoortdrift Mining Project (SMP), facilitated by Vanadium Resources Limited (VR8), expand across South Africa’s mining industry.  

As a junior vanadium developer, VR8 currently owns 74% of the world-class, tier 1, Steelpoortdrift Vanadium project in the Limpopo province of South Africa. VR8 leads the way across the vanadium market with its Steelpoordrift Mining project (SMP) which is the world’s largest vanadium deposit, with an indicated and inferred Mineral Resource and Ore Reserve of 612Megatons (Mt) at 0.75% V2O5 in situ. The deposit is an open-pit titaniferous magnetite deposit, located in the prolific Bushveld Geological Complex – a known mineral and vanadium-producing area. VR8’s project is within the reach of 7 processing plants, railway and road options, ports, and a range of utilities. A definitive feasibility study (DFS) of the project undertaken in 2022 confirmed the world-class nature of the deposit which is expected to have robust economics over an initial 25-year mine of life. 

Having completed the DFS, VR8 is working towards Final Investment Decisions which would focus on building the project development and execution team to get the maximum value out of the project through a range of FEED, debt financing and partnerships with strategic groups. Consequently, VR8 is working towards attaining 86.49% ownership of the project, which, subject to completion, is set to be achieved by the end of this year. Vanadium is now listed as a critical mineral in many countries, for which VR8 is a leader across its development. Through its key ownership of the SMP, VR8 is a clear leader amongst its development peers and looks to provide a much-needed supply to global markets. Once in production, VR8 will explore the full range of vanadium products, particularly the vertical integration opportunities of vanadium into downstream markets.  

The SMP comprises the open-pit mining of titaniferous vanadium ore, primary treatment of the ore through an onsite concentrator (using magnetic separation) and secondary treatment of the concentrate through a Salt Roast Leach (SRL) plant to produce a >98% V2O5 flake. The project will have two phases; the first phase will be the initial pre-production capex of USD 211 million, which will provide the infrastructure and will operate for the first four years. This phase involves the mining of 1.6 Mt of vanadium ore per year, which will be processed through the concentrator and SRL plants to produce 12ktpa of V2O5 flake.  

The second phase of the project will see VR8 take USD 188 million from the cash flow to expand the plant and allow for the quantity of flake produced to almost double to 21ktpa. The DFS identified a number of significant opportunities that would reduce costs and increase the potential Mineral Resources, Ore Reserves and the associated life of mine (LOM) to more than 180 years, whilst also decreasing the environmental impacts and increasing the total earning potential of the project.  

Therefore, having completed the DFS and upon completion of the Final Investment Decision set for Q4 CY2023, VR8 is committed to building its project development and execution team, beginning FEED studies, securing debt financing, and partnering with strategic groups to ensure that the maximum value of the project can be unlocked. Consequently, in February this year, Alex Oehmen joined the VR8 team as the General Manager of Operations bringing with him many years of experience as an industry veteran. The new General Manager will be set on driving the development and operations of VR8’s Steelpoordrift Vanadium Project towards a future of vanadium implementation across industries.  

However, the SMP project is not the only mining operation that VR8 undertakes, it also has the Quarts Bone Project located in the West Pilbara province in Western Australia. The project comprises a single granted exploration license and covers an area of approximately 15km2 which has identified key copper, zinc, and lead occurrences. Key developments in this project have been through the discovery of new volcanogenic massive sulphides. Exploration at the Quarts Bone Project to date has generated the Balla Balla, West Balla, and East Balla base of metal prospects which are located within a sequence of dacitic lava and volcanoclastic sediments and shales.  

At present, Balla Balla is the most advanced prospect with drilling intersecting widespread zones of zinc-lead-copper mineralisation along a 600-metre strike length and down drip to a depth of 250m below the surface. VR8 is set to explore the project further over the coming years with the aim of evaluating the advanced Balla Balla Prospect and the surrounding prospects. These prospects may determine the potential for mining operations and identify additional economic mineralisation. 

As the world moves towards a greener future, South Africa is expected to play a significant role in global battery value chains by 2030. This is because the global battery value chain has the potential for 10-15GWH for domestic demand with battery energy storage. The country’s battery storage market could reach 9,700Mwh of demand and 10,400Mwh in the wider South African region by 2030 which is a significant increase from just a few hundred Mwh in 2020. Therefore, the growing demand for vanadium for use in Vanadium Redox Flow Batteries (VRFBs) allows VR8 to play a significant role in assisting the world via battery supply chains towards a future of renewable energy. VR8 will explore the full range of Vanadium products that are possible including vanadium trioxide, ferrovanadium, titanium dioxide, and ilmenite. These explorations will allow VR8 to understand the potential of its Steelpoordrift deposit and move towards the vertical integration of vanadium into downstream markets through electrolyte, VRFB manufacturing and energy generation for a greener future.  

Overall, VR8 are a key player in the world of vanadium as it operates the world’s largest vanadium deposit positioning the company in a crucial position ready to tackle the vast array of markets which vanadium is being adopted into. As such a vital element, its use across renewable battery options, sees the future of the company look very bright as the demand for vanadium is set to increase as the world moves evermore towards green energy. We look forward to seeing how VR8’s role in global supply chains continues to develop as its mine operation at the Steelpoordrift project continues to expand.