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- Australian Vanadium has finished constructing its vanadium electrolyte facility in WA
- The asset is designed to produce 33MW per year of high-purity electrolyte for vanadium flow batteries (VFBs)
- The facility received close to $4M in government support and AVL is hoping to sell product to WA state-owned Horizon Power
- At least one small grid-scale vanadium battery is already set for delivery under an existing program with Horizon
- AVL shares were up 13.89% to 2.1c in lunchtime trade
Australian Vanadium (AVL) has finalised the construction of its vanadium electrolyte manufacturing facility north of Perth in Western Australia.
The facility is designed to produce enough vanadium electrolyte per year to supply the equivalent of 33MW worth of battery power.
The vanadium electrolyte isn’t for EV batteries – instead, the company is targeting the growing vanadium flow batteries (VFB) market.
VFB are a type of energy storage battery, which are often called ‘big batteries’ for straightforward reasons – they’re the size of a sea container. These batteries are capable of storing renewable energy for 12-hour-plus timeframes, making them a crucial technology for the energy transition.
In layman’s terms: a VFB can store power generated by wind and solar harvested in the day, “hold onto it” into the evening, and then discharge into the grid at night.
This means that people can use solar power to turn on the A/C at night – long after the sun has stopped shining.
Technology Metals merger ongoing
Australian Vanadium isn’t the only company on the ASX seeking to develop vanadium – eventually, vanadium pentoxide – for use in the domestic big battery market.
Its joined in its pursuits by Technology Metals (TMT), headed by Ian Prentice. And AVL wants TMT to join it – which is why the latter’s shareholders have been busy digesting a takeover bid from AVL.
Speaking at a media briefing last week, Prentice told The Market Herald that right now, both companies find themselves doing roadshows “one week after the other,” ultimately talking about the same thing.
And with both parties perceiving they will benefit from becoming a unified company with one orebody, TMT’s Board has been advising its shareholders accept the deal.
TMT shareholders smiling on improved offer
Except not everybody was happy.
Prentice acknowledged that he’d heard grumbles from his retail base, and at least one T20 shareholder, while speaking to us last Friday.
Australian Vanadium got the message, and this week improved its takeover offer for TMT – the latter’s shareholders will now get 14 AVL shares for every 1 TMT share held, as opposed to a former deal that proposed 12 AVL shares.
It isn’t hard to see why shareholders were concerned. As at 1pm AEDT Friday, TMT shares are worth 22.5c – while AVL is worth 2.1.
At the start of H2 CY2023, TMT shares were close to 40c.
A revised offer giving TMT shareholders closer to 30c worth of AVL shares appears to have done the trick – though, the merger isn’t guaranteed, and shareholders will vote on January 16.
The Market Herald understands the mood in the room, as far as shareholder sentiment goes, has improved since last Friday.
Facility underpins AVL strategy
AVL’s facility, just north of Perth, is being perceived by some shareholders as a palpable milestone – while at least one HotCopper user wanted a better idea of financials surrounding the facility.
At any rate, the vanadium electrolyte facility does put Australian Vanadium on the map, as far as the government’s radar is concerned – not only because it handed nearly $4 million to AVL to help build it.
WA’s state government can now boast it has facilitated the evolution of onshore net-zero tech innovation.
Construction of the facility was completed by Western Australian-based engineering company Primero Group, a subsidiary of NRW Holdings (NWH).
A formal handover has now been passed on to the commissioning team to begin using in-house proprietary refining technology on-site.
Commissioning is expected to wind up in early 2024.
The start of a WA vanadium industry?
As for where the vanadium electrolyte will actually go, AVL CEO Mr Arvidson last week told The Market Herald that he hopes to sell it to WA state-owned utility Horizon Power.
AVL and Horizon Power, to that end, are already collaborating on at least one contract that will see AVL deliver the latter a remote small grid-scale VFB in WA’s north.
“We are pleased to have been able to successfully and safely execute another segment of our ‘pit to battery’ strategy” AVL CEO Graham Arvidson said.
“Production of AVL’s first vanadium electrolyte will position the company to become a trusted supplier for battery projects in Australia and the wider region.”
AVL subsidiary VSUN leads the charge on marketing its VFB tech to domestic and overseas customers.
AVL shares were up 13.89% to 2.1c in lunchtime trade.
