Australian Vanadium Ltd (ASX:AVL) has today executed a collaboration grant agreement with the Commonwealth of Australia to the tune of $49 million which will support efforts to create an Australian vanadium battery industry.
The agreement, which is part of the Modern Manufacturing Initiative – Manufacturing Collaboration Stream, follows the announcement by AVL of the awarding of the grant in March 2022.
It will support the company’s flagship Australian Vanadium Project, one of the most advanced critical mineral vanadium projects being developed globally, with the potential to produce 11,200 tonnes per annum of vanadium pentoxide over a 25+ year mine life.
Initial payment next month
This project is a pivotal part of AVL’s work, in collaboration with industry partners, to create an Australian vanadium battery industry incorporating domestic downstream processing.
An initial payment of $9.8 million is scheduled to be received in June 2023, followed by three further payments, with the final payment scheduled for August 2025.
These Federal Government funds will support eligible activities to construct and commission a concentrator and high-purity vanadium processing facility capable of using green hydrogen as part of the extraction process for the project.
The critical mineral extraction process is a key precursor for vanadium electrolyte manufacturing.
“Of great benefit”
CEO Graham Arvidson said, “AVL has been working closely with the Australian Government and we are pleased to announce execution of the agreement.
“The grant will be of great benefit to AVL as we seek to optimise and finalise our financing and offtake arrangements and continue to move the project forward for the benefit of the mid-west region of Western Australia, and Australia more broadly.
“We are very grateful to the Australian Government and the grant team who worked tirelessly to finalise this important outcome.”
Scope of grant
The scope of the Commonwealth grant encompasses support for all stages of the vanadium production value chain, from mining and concentrating to vanadium processing for use in electrolyte production, a key enabler for the Australian vanadium redox flow battery industry.
As part of the activities under the grant, AVL will also collaborate with Bryah Resources Limited to explore options to extract cobalt, nickel, copper and gold economically from the project.
Broader activities needed to realise the overall project, such as development of the mine and supporting infrastructure, will be funded from sources other than the grant.
This agreement has a commencement date of May 29, 2023, and ends on July 31, 2026.
The grant will be paid progressively over the term of the agreement, subject to milestones and compliance by the company with its obligations under the agreement.
At the time of the grant announcement in 2022, the company’s managing director Vincent Algar said: “AVL is delighted to have been awarded this grant from the Australian Government.”
“Our project will create hundreds of jobs in Australia and help to build the critical vanadium industry both locally and internationally.”
“We have developed an innovative and collaborative approach to building a fully integrated project, from mine through to processing and end use in the steel and battery markets.
“Our collaborations are allowing us to build a project with unique social and environmental benefits.
“We look forward to working with our partners to bring the Australian Vanadium Project into production and further develop downstream opportunities for green steel and the vanadium redox flow battery market,” Algar added.
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