Vanadium – the Key Strategic Green Metal
Capital 10x launched the ‘Green Metals in Focus’ series in October 2020, highlighting vanadium as a strategic metal in the green industrial revolution. Vanadium is an essential part of the global drive to increase industrial efficiency and battery storage.
We also covered a ground-breaking study which provided quantitative numbers on the resulting energy savings when vanadium is added to steel reinforcement bars. Using vanadium micro alloyed steel instead of lower grade rebar has proved to be an advantage for the construction industry.
For example, an up to 40% reduction in the Carbon Footprint of a RC Beam is achievable when produced with vanadium alloyed steel. The damage and aftermath of the 2008 Sichuan Earthquake fostered a demand for higher standards in the Chinese construction industry. Vanadium alloyed steel is sought out by Chinese builders for its light weight and tensile strength.
Capital 10X believes the market has underappreciated the significant green value of vanadium as an industrial metal. The vanadium price has yet to recover compared to other industrial and green metals, we believe this provides a very attractive risk / reward trade off for investors.
Largo – The Best Positioned Vanadium Producer
In our vanadium initiation report we identified Largo Resources (TSE:LGO) as the company producing the highest grade vanadium (double that of its next closes peer – Bushveld) and at a very attractive cost (1st quartile production cash cost).
2020 Full Year: Record Production & Record Sales
On January 20th Largo Resources announced stellar full year 2020 operational results, delivering record V205 production, up 12% year-over-year to 11,825 tonnes; and a record recovery rate of 81.4%, an increase of 4% from the previous year.
The company also exceeded the high end of their 2020 sales guidance by 260 tonnes.
2021 Guidance – Geared for Growth
Largo Resources provided investors 2021 operational guidance that was geared to growth.
- V205 production for 2021 will be between 12,000 and 12,500 tonnes.
- And V205 equivalent sales will be in the range of 12,250 and 12,750 tonnes.
VCHARGE± – Lower Carbon Battery Technology
A key focus in 2021 for the company is the advancement of Largo Clean Energy and its VCHARGE± battery technology for the high growth renewable energy storage sector.
In December 2020, Largo Resources launched Largo Clean Energy, providing VRFBs (Vanadium Redox Flow Batteries) for the global renewable energy storage market.
Some of the key features of their VRFBs is the long life of the battery (20 years), consistent performance of the battery over time (even after thousands of cycles), non-flammability and the ability to re-use the vanadium electrolyte at the end of the battery’s life.
This makes the VRFB ideal for commercial and industrial micro-grids, renewables integration, EV charging and grid applications.
What sets Largo Clean Energy Apart
- Its acquisition of patented VRFB electrolyte processing technology
- Leading flow battery stack design
- Its supply of high-purity vanadium from Largo Resources
- A fast growing energy storage market
Largo believes that renewable energy, storage demand has reached an inflection point. The facts are indeed on their side – global energy storage capacity row at a CAGR of 31%, recording 741 GWh of cumulative capacity by 2030.
With the election of President Joe Biden, the US will now join other developed nations in a global shift toward a lower carbon future driven by the Paris Agreement participants and large-scale company commitments.
Largo Resources is a market awareness client of Capital 10X.
The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.