Ferro-Alloy Resources Limited (LON:FAR) shares jumped higher on Wednesday as the company revealed that it has developed technology for the production of electrolyte for vanadium flow batteries (VFBs).
The vanadium mining and processing company, with operations based in Southern Kazakhstan, said it has applied for a patent for the production of vanadium electrolyte directly from ammonium metavanadate (AMV). Vanadium electrolyte is used in the operation of VFBs.
The ability to make electrolyte directly from AMV cuts out the cost of conversion of AMV to vanadium pentoxide from which electrolyte is usually made, giving the company not only the required know-how to enter this market, but also a cost advantage over traditional processes, it said.
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Vanadium is considered to be a battery metal as a result of its use in VFBs which are used for the storage of energy from intermittent green sources such as solar or wind.
VFBs have several advantages over the more familiar lithium-ion battery technologies, including that they can be fully charged and discharged repeatedly without damage; the electrolyte does not degrade over time; energy storage capacity can be scaled independently of power by adding larger electrolyte tanks; they are not susceptible to thermal runaway, the electrolyte can be easily reused or recycled at the end of the battery life; and are suitable for long discharge periods.=
Market for VFBs expected to grow rapidly
In a statement, Nick Bridgen, Ferro-Alloy’s CEO, commented: "Developing this electrolyte technology demonstrates the capability of our technical team and will allow us to take part in the growing clean energy revolution. We are already perhaps the only significant new producer that can provide the huge quantities of vanadium that will be needed without driving the price up to levels which are uneconomic for the VFB industry."
The market for VFBs is expected to grow rapidly as the world moves towards increased use of renewables with forecasts of almost 60% annual growth to 20251.
This largely new demand for vanadium, combined with strong growth expected from vanadium's traditional markets, is expected to lead to exceptionally strong growth in vanadium consumption.
Ferro-Alloy aims to become a regional supplier of electrolyte and is currently in early discussions with battery producers.
The company also said it has issued five bonds with a nominal value of US$2,052.78 on the Astana Stock Exchange in Kazakhstan totalling US$10,263.90.
The bonds are unsecured and carry an interest rate of 5.8% per annum, payable twice yearly. They have a term of three years from the date of the subscription and the investor has the right to ask for early repayment after a minimum period of 12 months.
Shares jump, VSA repeats 'buy'
In early morning trade in London, shares in Ferro-Alloy Resources were nearly 23% higher at 10.75p.
In a note to clients, analysts at VSA Capital said: "The ability of VFB manufacturers to gain a significant share of the market is in part dependent on the availability of vanadium electrolyte with many incumbent producers geared to producing steel products which would need conversion.
"As often with these industrial minerals there is a premium price attached to producing high-quality products for specific industrial uses such as vanadium electrolyte for batteries, the fact that FAR is making strong progress is highly positive in our view as it would enable the company to capture a far greater share of the potential value, in our view, in excess of the V2O5 benchmark and in relation to its peers."
The VSA analysts reiterated their 'buy' rating and 1712p target price on Ferro-Alloy Resources shares.