Understanding the Upcoming Vanadium Crunch

With the rise of variable renewable energy sources such as solar or wind, investment in long-term electricity storage batteries will grow in the coming decades. These batteries are mineral-intensive. One mineral in particular which will become increasingly important is vanadium, a metal which does not degrade over time and thus can extend the useful life of batteries. Currently, vanadium’s use in batteries is still being researched, but advances in vanadium batteries would upend global mineral markets. To date, only five countries have meaningful proven vanadium reserves: the United States, Australia, China, Brazil and Russia.

Forecasted Mineral Consumption in the Long-Term Battery Market

The IEA asserts that demand for critical metals in batteries will depend on whether (and how quickly) companies can develop vanadium flow batteries. Figure 1 below shows the IEA’s estimated demand for critical minerals in both a base scenario and a scenario with earlier-than-expected adoption of vanadium flow batteries. Early adoption of flow batteries would likely significantly impact vanadium demand.

As shown in Figure 1 above, accelerated development of flow battery technology would increase demand for vanadium. But what about the other metals? Figure 2 below shows the delta in metal demand between the IEA’s base case and an accelerated flow battery development case. The impact of accelerated flow battery demand is negligible for most metal battery inputs but would increase the annual demand for vanadium by nearly 500 kilo-tons by 2050.

Global vanadium reserves

If flow battery research and development progress rapidly, there will be an increase in demand for vanadium. However, this metal does not commonly occur in nature, particularly when compared to other battery metal inputs. The United States Geological Survey (USGS) publishes an annual dataset outlining various metals’ recent mining production and reserves. Figure 3 below shows the relative size of existing mining reserves for cobalt, copper, manganese, lithium, nickel, and vanadium. Global mining reserves of vanadium are minuscule.

Geographic Diffusion of Vanadium Reserves

Figure 4 below shows the six countries with existing vanadium mining reserves: the United States, China, Russia, Brazil, South Africa, and Australia. China and Australia have the most vanadium reserves, but no single country has more than 10,000 tons of existing vanadium reserves.