A Brief Overview Of Vanadium Production

Writen By: Richard Mowat


To understand the position of companies in the global vanadium market and the importance of vanadium demandin the energy, electronics and defense sectors, it is necessary tounderstand what vanadium is and why there simply isn’t a sufficientsupply. Vanadium is a metal and is the seventeenth most common elementin the earth’s crust. It is present in concentrations rivaling zinc andnickel, which are considered abundant, and occurs as a component of atleast 55 minerals. Unlike zinc or nickel, vanadium is never found as apure metal or pure oxide. It does occur in many mineral forms, but it isonly present in small concentrations within these minerals. Only a fewminerals are commercially significant to the vanadium market. Carnatite, which is a potassium uranium vanadate mineral, is an important source of U.S. uranium oxide production.

Magnetite, which is an iron (II) iron (III) oxide, is commercially important in iron and steel production.These minerals never contain high concentrations of vanadium.Commercial extractions of vanadium have been considered economicallyfeasible only when the market price of the primary product, such as ironor uranium, supports additional extraction operations to meet vanadium demand.That viewpoint is changing, however, as the demand for vanadiumincreases. For example, UMETCO Minerals Corporation mines carnatite foruranium production and produces vanadium as a co-product.The extraction of vanadium in this process is subsidized by the marketprice of the uranium oxide. Prior to 1985, more than 50 percent of U.S.vanadium production was tied to uranium oxide production from carnatiteores mined from the Colorado Plateau.Uranium oxide values fell dramatically in the wake of the Three MileIsland incident, and they pulled vanadium production down with them. Bythe early 1990s, the market price had dropped by 75 percent.

Vanadium extraction became unprofitable and co-production nearly ceased. Like carnatite, titaniferrous magnetiteores also contain only small amounts of vanadium. Due to the largequantities of magnetite used in integrated ironworks and steelworks,magnetite is the largest commercial source of vanadium. Magnetite isprocessed into pig iron, which is subsequently processed into steel withthe formation of a vanadium-rich intermediate slag byproduct. Vanadiumis also recovered from other large industrial processes. Monsantoproduces a significant amount of ferrophosphorus slag byproduct fromphosphorus and phosphoric acid production. Vanadium can be produceddirectly from small vanadiferous clay deposits found in Arkansas, but the largest American vanadium reserves are the Idaho phosphate deposits. Vanadium and nickel are present as contaminants in most sources of crude petroleum. The vanadium content of some petroleum fuels is a known source of early corrosion in oil-fired boilers. Fly-ash derivativesand petroleum combustion residues have become important post-1990sources of U.S. vanadium production, as have the spent oxidationcatalysts from sulfuric acid production.

The Importance Of Vanadium

Vanadium is much more than just another metal. It is used extensively in the steel industry, has a growing role in the alternative fuel market, is essential as a catalyst for the production of important industrial chemicals, and is a critical component military aerospace technology. The largest vanadium demandcomes from the steel industry. Ferrovanadium is an additive to steelthat improves the grain refinement of the metal, allows the steel toattain significantly increased hardness values, and dramaticallyimproves the strength of the steel. The usefulness of ferrovanadium wasdiscovered in the early 20th century. Vanadium steel was usedextensively in the production of Ford Model T automobile frames, and Ford advertised it as “the strongest, toughest and most enduring steel ever manufactured.” vanadium demandto meet the needs of the steel industry has been increasing ever since.Vanadium steel is used for axles, gears, crankshafts, frames, and manyother critical components that will be subjected to high stress. Theincrease in steel strength is due to the formation of stable vanadiumcarbides and vanadium nitrides within the steel.

Metallurgical use accounted for approximately 97 percent of domestic vanadium demand in 2009. Vanadium steel alloys are produced as vanadium high-carbon steel,which contains less than 0.25 percent vanadium, and vanadium high-speedtool steel that contains between one and five percent vanadium.Vanadium also improves the strength and temperature characteristics of titaniumalloys. It is a critical additive to the aluminum titanium alloy usedto produce jet engines and jet aircraft frames. A typical titanium alloyused in aerospace applications contains roughly six percent aluminumand four percent vanadium. Because vanadium forms stable alloys withboth iron and titanium, vanadium foil is used as a bonding agent whencladding titanium skins to steel products. Vanadium is also used insidenuclear fusion reactors. It has a moderate thermal neutron-capturecross-section, and the vanadium isotopes produced by neutron-capturehave a short half-life. Nuclear energy equipment accounts for a small but critical vanadium demand.

Vanadium ConsumptionApproximately 85 percent of the vanadium market focuses on ferrovanadium steel or titanium additive. Vanadium pentoxide, which is also called vanadium oxide,accounts for a much smaller percentage of overall vanadium consumptionbut is also an important industrial and technological compound. It isused as a mordant to fix dyes to fabrics, in printing inks, and as acatalyst in the production of maleic anhydride, which is essential tothe manufacturingof polyester and alkyd resins, and in the oxidative production ofsulfuric acid. Lithium vanadium pentoxide anodes are used with lithiumcobalt oxide cathodes in the production of high energy density vanadiumpentoxide batteries. These batteries are important in the development ofwind farmenergy production and storage facilities. Vanadium pentoxide is alsocritical in the production of vanadium dioxide ceramics. Vanadium-dopedbismuth ceramics exhibit unique ferroelectric and piezoelectricproperties that make them useful in solid-state electronic applications.Superconductive magnets are produced with vanadium-gallium mixtures. vanadium stocks have increased in value as product demand in technology applications has continued to increase.

Sources Of Vanadium

Vanadium ProducersSouth Africa, China and Russia currently dominate the world vanadium market.All produce vanadium primarily as a recovery product from theprocessing of titanium-rich magnetite ore into pig iron and pig ironinto steel. The slag intermediate has high vanadium oxidecontent and can be processed into ferrovanadium or vanadium pentoxide.The United States imported 1,080 metric tons of ferrovanadium in 2010.The Republic of Korea supplied 38 percent of those imports; the Czech Republic provided 30 percent, and 20 percent came from Canada.In that same time period, the U.S. imported 2,500 metric tons ofvanadium pentoxide. The Republic of South Africa, which holds theworld’s largest known exploitable reserves of vanadium in thetitanomagnetite seams of the Bushveld Complex, provided 39 percent ofthose imports from 2006 to 2009. Russia provided 32 percent of imported vanadium oxide,and China supplied 28 percent. There is growing concern that China maydeclare vanadium a strategic element and severely limit exportactivities. The United States relies heavily on imported sources ofvanadium, but domestic production of this important metal has beenincreasing. In 2006 and 2007, 100 percent of the vanadium consumed inthe U.S. as vanadium pentoxide or ferrovanadium was from foreignsources. That percentage dropped to 81 percent in 2009, and in 2010 thenet important reliance was only 69 percent of apparent consumption.

Vanadium Global Demand

Heightened global vanadium demand is pushing the steel industry to seek new vanadium sources. China and Japan have recently imposed more stringent constructioncodes that will require the use of stronger rebar, and producingstronger rebar requires the use of vanadium. The use of vanadiumpentoxide batteries for mass storage of energy from renewable sources ispredicted to rise sharply in the coming years, and vanadium alreadyplays a critical role in aerospace and military technology. All of thesefactors will place increasing vanadium marketdemand on an already limited supply.   The global economic downturnin 2009 reduced demand for vanadium, but the market demand has recoveredand is once again on the rise. U.S. imports of ferrovanadium increasedfrom 253 metric tons in 2009 to 1,080 metric tons in 2010 and willincrease further as the economy strengthens and the demand for high-techsteel rises. In 2010, vanadium market priceswere 45 to 50 percent higher than prices during the same months in2009. Current 10-year market forecasts conducted by CPM Group indicatethat strong demand for vanadium products will keep market prices at someof the highest prices observed over the past decade.

Investing In Vanadium

The United States currently has no mining operations which primarilyproduce vanadium. That is set to change in 2012 when American Vanadium,formerly known as Rocky Mountain Resources, begins producing vanadium from the Gibellini Mine in Nevada. The company plans to meet five percent of global vanadium demand and will operate the mine solely for the production of vanadium. Investors have historically had difficulty investing in vanadium stocks. It has always been considered a minor metal produced as a small component of much larger business operations. investing in vanadiumstocks through publicly traded companies inherently involves investingin the company’s primary products – usually iron, steel or uraniumoxide. Pure plays investing in vanadium aredifficult to find. Ten North American companies are currently involvedin vanadium mining and processing. All are Canadian. They are:

  • American Vanadium Corp. (TSX-V:AVC)
  • American Vanadium Corp. (formerly Rocky Mountain Resources Corp.) focuses on environmentally responsible mineral exploration and development in politically stable countries. The company is currently developing the Gibellini Project in Nevada.

    American Vanadium

  • Expedition Mining, Inc. (TSX-V:EXU)
  • Expedition primarily develops gold sources in the United States. Gold mining often produces materials for the vanadium market as well.

  • Energy Fuels, Inc. (TSX:EFR)
  • Energy Fuels primarily develops uranium in Colorado, Utah and Arizona. vanadium oxide is often co-produced with uranium oxide. 

  • Apella Resources Inc. (TSX-V:APA)
  • Apella Resources Inc. (Apella) is engaged in the acquisition and exploration of mineral properties in Canada. The Company is an exploration firm focused on prime grassroots vanadium exploration projects in North America.

    Apella Resources Vanadium

  • Denison Mines Corp. (TSX:DML)
  • Denison operates three U.S. uranium mines. vanadium oxide is often co-produced with uranium oxide. 

  • Adriana Resources Inc. (TSX-V:ADI)
  • Adriana is a Canadian company that primarily operates iron mines in Brazil but is currently developing iron ore projects in Canada. Iron mining often produces materials for the vanadium market as well.

  • Largo Resources, Ltd. (TSX-V:LGO)
  • Largo focuses on exploring and acquiring undervalued mining assets throughout North and South America. The Maracas Platinum-Vanadium mines in Brazil are in advanced stages of development.

    Largo Resources

  • Silver Spruce Resources, Inc. (TSX-V:SSE)
  • Silver Springs focuses on uranium developments in Canada. vanadium oxide is often co-produced with uranium oxide. Investment with this company would be investing in vanadium stocks.

  • Stina Resources, Ltd. (TSX-V:SQA)
  • Stina develops mineral properties in North America.

  • Continental Precious Minerals Inc. (TSX:CZQ)
  • Continental is a Canadian company that owns and operates uranium properties in Sweden. vanadium oxide is often co-produced with uranium oxide. Investment with this company would be investing in vanadium stocks.

Investment opportunities are available now, and smart investors knowhow to keep ahead of the technological curve. The demand for vanadium incritical aerospace alloys and solid-state electronics, coupled withdecreasing supply from Chinese sources, make vanadium stocks a smart buy now.

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Richard Mowat


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