Vanadium Resources (VR8), a South Africa-focused, ASX-listed junior, made a groundbreaking announcement on Thursday regarding an offtake memorandum of understanding (MoU) with Panjin Hexiang New Materials Technology, one of China’s top vanadium nitride producers.
Under the terms of the MoU, VR8 will supply 4,000 t/y of vanadium pentoxide (V2O5) from its Steelpoortdrift and Tweefontein vanadium operations to Hexiang over a five-year period, with the potential for an additional five-year extension. This agreement represents about 37% of VR8’s planned V2O5 flake production capacity of 11,000 t/y for Phase 1 operations.
VR8 CEO John Ciganek expressed excitement about the partnership, highlighting Hexiang’s expertise in converting V2O5 into vanadium-nitrogen alloys primarily used in the steel industry. Additionally, VR8 still has production capacity to explore other offtake opportunities or potentially enter the vanadium redox flow battery market.
The Steelpoort project, with a mineral resource of 680 million tons and a proved and proven ore reserve of 77 million tons, demonstrates significant potential. VR8 plans to produce a vanadium-rich concentrate from Steelpoortdrift, which will be sent to the Tweefontein project to produce an average of 18,000 t/y of V2O5.
With proposed throughput rates, the Steelpoortdrift project has the capacity to sustain production for over 180 years. A 2022 definitive feasibility study confirmed the projects as world-class deposits with an improved attributable net present value of $1.05 billion, following VR8’s increased ownership to 86.49% in the Steelpoortdrift project.
This partnership between VR8 and Hexiang signifies a significant step forward in the vanadium industry, showcasing the potential for growth and collaboration in the market.
