RE:RE:RE:RE:PROCEED WITH EXTREME CAUTION Consider the risks associated with both mining vanadium and purchasing it to produce vanadium electrolyte. On one hand, the capital investment required for building and operating a vanadium mine is enormous, with uncertain returns given the volatile nature of commodity markets. Moreover, the extraction process can be environmentally disruptive and carries inherent risks such as regulatory hurdles and geopolitical instability in mining regions.
On the other hand, purchasing vanadium pentoxide on the spot market presents its own set of challenges. The price fluctuates, making it difficult to predict future costs and potentially impacting profit margins. Additionally, the conversion process to produce vanadium electrolyte consumes around 0.5 to 0.7 pounds of vanadium pentoxide per liter, further driving up costs and supply chain risks.
In this context, let’s examine Vanadiumcorp (ticker symbol: VRBFF). Despite its promising yet idle process technology and un-economic mineral resources, several critical questions remain unanswered. Firstly, Vanadiumcorp’s price per liter of electrolyte is undisclosed, raising concerns about transparency and cost competitiveness. Secondly, the absence of secured contracts with any company to purchase their electrolyte begs the question: why haven’t potential buyers been attracted?
Furthermore, it’s crucial to note that at $5 per liter, vanadium electrolyte equates to approximately $100 per kilowatt-hour (kWh) in energy storage terms. This pricing, albeit competitive in the context of grid-scale energy storage, still presents a challenge when compared to the overall cost of lithium batteries, which can be lower on a per-kWh basis.
These uncertainties underscore the inherent risks associated with both mining vanadium and purchasing it for electrolyte production. Companies must carefully weigh these factors and explore alternative strategies to mitigate operational risks and ensure sustainable growth in the energy storage sector. GLTA, VITF