Thursday, October 11, 2018 16: 58PM / By Tsvetana
Paraskova for Oilprice.com
The
lithium ride was a great one. Cobalt, too. All they needed was their Elon Musk
moment, which came in the form of the Nevada battery gigafactory. The next Elon
Musk moment won't be about lithium at all—or even cobalt. It will be for an
element that takes everything electric to its revolutionary finish line:
Vanadium.
The one moment that will change everything … and that moment may be near.
Vanadium is lithium on steroids—wildly bigger and the only way forward from
here. We may have already reached the peak of our electric revolution through
batteries with lithium.
We need bigger batteries, preferably the size of a football field—or 20.
That's vanadium—Element 23. The answer to our issue of scale
"It's no longer a technological maybe," says Matt Rhoades, president
and CEO of United Battery Metals, a Colorado vanadium explorer sitting
on one of the few known sources of the next big battery metal in the entire
United States.
Rhoades should know … his company is behind the discovery that hopes to put
America definitively on the vanadium map. UBM's Wray Mesa Project in Colorado
has a mineral resource base estimate indicating resource of
around 2.7 million pounds of vanadium—not to mention all the uranium they
already know is there for additional upside.
"Vanadium is here, and lithium is scared because the $13-billion energy
storage market has already found its new poster boy," Rhoades told
Oilprice.com.
The Moment of
Truth
Indeed, Rhoades is an expert at timing.
The worldwide battle for vanadium is ramping up …
The Chinese have already had their Elon Musk moment …
The U.S. has none …
And vanadium was the best-performing battery metal last year, beating out even
lithium and cobalt.
The truth is that it's been a long road for vanadium to not only break into the
energy storage market, but to actually become the future of the energy storage
market.
The next ‘moment' will be when someone in the U.S.—always one step behind the
Chinese—announces plans for an American vanadium battery gigafactory. Anyone
who hasn't gotten in before that moment will be nursing their lithium hangover.
China is already building the world's largest vanadium flow battery (VFB)
gigafactory in Dalian, with the massively powerful (200MW/800MWh) batteries to
be manufactured by Rongke Power.
Source:Electrek IMGURL:https://d32r1sh890xpii.cloudfront.net/tinymce/2018-10/1539210234u1.png
It covers an area bigger than 20 soccer fields.
And thanks to the Chinese, vanadium was the best-performing battery metal last
year.
Source: Bloomberg
And this year is the kicker. In just the past month, ferro vanadium prices have
soared 33%. A month ago, ferro vanadium prices were at $79 per kilogram. Now
we're looking at $105 per kilogram.
Vanadium pentoxide flake is following the same speedy upward mobility:
And it's vanadium pentoxide that is the main ingredient in vanadium redox flow
batteries used for grid energy storage.
For a junior minor like UBM with a market cap of just over $10 million—that
potential 2.7 million pounds of vanadium begins to sound like strategy at its
best and brightest.
Why Vanadium
Changes Everything
But let's back up a bit …
If you were just getting the hang of lithium and cobalt in the battery mix,
vanadium might sound complicated—but it's not.
It's as simple as size. This is where we get to scale up because when it comes
to energy storage, bigger is better. In fact, bigger is the only way forward in
this game.
This is possible because vanadium flow batteries store their energy in tanks.
The fluid (electrolyte) that transfers charges inside a battery flows from one
tank through the system and back again, making a closed circuit. They can
charge and discharge simultaneously.
We're talking tanks that can be as big as you want them: an aquarium, a
shipping container or even an Olympic swimming pool—as big as your imagination
can take you.
For renewable energy it is a game-changer. VRBs will forever change the capacity
of wind and solar energy, making it limitless and cheap.
Vanadium is superior to lithium in every way. Not only does it have eternal
life (unlike lithium), it's not explosive, flammable or toxic.
Not only can it be scaled up cheaply, but it's actually cheaper to scale it up,
making it the antithesis of lithium.
Put in another way: It's tough to scale up a lithium-ion system. If you double
the size, you double the cost. Not so with vanadium: All you have to do is make
the tank bigger, and the bigger the scale the lower the cost.
And that scaling up is already happening. Vanadium batteries are already
providing complete energy storage system for $500 per kilowatt hour. In less
than a year, that is expected to be down to $300. By 2020, we could be looking
at $150/kilowatt hour.
A lithium-ion battery gigafactory couldn't come close to this fast-paced cost
reduction.
Vanadium:
Finally, America Gets A Piece of the Pie
Even though this is the biggest energy story right now, vanadium isn't just a
bet on batteries—that's why Mining.com calls it "the metal we can't do
without and don't produce".
Just as UBM's new vanadium discovery is also an original uranium resource,
vanadium can also be used in nuclear energy. By 2025, analysts estimate that 85
percent of all vehicles will incorporate vanadium alloy to reduce their weight
and increase fuel efficiency.
Still, strategic as it is, America has fallen behind, and now that the global
race for vanadium is on in the battery game, that will hurt.
In China, vanadium is already becoming the alternative to lithium. The next big
moment will be this:
"If
a vanadium battery producer steps forward with bold plans to produce vanadium
flow at mass scale, giving the industry its Elon Musk or lithium ion moment,
the potential for the technology to be the second most deployed ESS battery in
the world is there," says Simon Moores of Benchmark Mineral Intelligence,
a battery materials research and price discovery provider out of London.
Rhoades certainly agrees and UBM is in that wonderful position of potentially
becoming the only American source for the key rare earth metal that will power
our scaled-up "liquid electricity" breakthrough.
"The vanadium flow battery scale-up for massive energy storage makes the
electric vehicle push look like child's play," he said. "Lithium was
a teaser. Vanadium is where it all gets huge."
We watched lithium take center stage, but that may be just the prologue.
Vanadium could be the conclusion.
Other companies in the booming commodity space you should keep an eye on:
Tesla Motors Inc. (NASDAQ:TSLA): No large cap company has dazzled over
the past couple of years like Tesla, which overtook giant GM this year in
market cap—a major, unexpected feat. Tesla is the future, and its stock price
agrees.
Tesla's electric cars will eventually be more profitable than traditional cars,
and easier to produce. Costs will keep coming down, especially now that Tesla's
has launched its battery gigafactory in Nevada, and when it gets battery (and
lithium) prices down.
It is entirely feasible that Tesla will be selling over 2 million cars annually
in less 6-7 years from now, despite recent management issues.
General Motors (NYSE:GM)
is a household name. GM was born at the turn of the 20th century and has been a
leading innovator in the automotive industry ever since. Even though it's been
surpassed in market cap by Tesla (of all companies), it is still the furthest
ahead of the Big 3 car makers from Detroit in terms of EVs and self-driving
cars.
Recently, GM acquired Cruise Automation—a self-driving car company, and it
seems determined to forge ahead even faster to play catch-up with the future.
Additionally, GM is a leader in the booming electric vehicle market. As
countries across the world begin to pass regulations on combustion engines, GM
stands to gain significantly as an early adopter in the EV game.
Cameco Corporation
(NYSE:CCJ) Cameco is one of the largest global producers and
sellers of uranium and nuclear fuel. Its operating uranium properties include
the McArthur River/Key Lake, Cigar Lake, and Rabbit Lake properties located in
Saskatchewan, Canada; the Inkai property situated in Kazakhstan; the Smith
Ranch-Highland property located in Wyoming, the United States; and the Crow
Butte property situated in Nebraska.
While many analysts see low uranium prices as a problem for miners, the OPEC
like move from world uranium leader Kazakhstan to bump prices has benefited
Cameco and its peers significantly.
FMC Corp. (NYSE:FMC)
founded in 1883, FMC has been around the block and back. FMC has a long history
stretching between many different industries, but within all of them, FMC has
remained a leader in innovation.
FMC's involvement in the lithium industry is particularly notable. The company
is one of the top three in lithium and associated technologies. And recently,
the company announced that it will be launching a new company, Livent,
which aims to raise $100 million in an initial public offering to establish its
place as a dominant lithium supplier.
Ballard Power Systems
(NASDAQ:BLPD) Ballard develops and produces hydrogen fuel cell
products for markets such as heavy-duty motive, portable power, material
handling and transportation. In addition to its production and development of
fuel cell products, Ballard also holds over 2,000 patents/applications.
At the end of August, Ballard announced a huge divestment agreement,
releasing non-core assets to Revision Military Ltd., for up to $16 million in
cash to provide a hefty boost to its fuel cell business.
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