Bushveld Minerals is expected to move forward with plans for a vanadium electrolyte plant in South Africa after a study predicted the demand for batteries would increase substantially.

The mining company together with the World Bank’s Industrial Development Corporation (IDC) has produced a paper, which indicates a peak in the demand for vanadium redox batteries (VRFB) between 2025-2030.

Vanadium is seen as a better and cheaper alternative than lithium for long life electricity storage applications.

The company is expecting an increase in the use of energy storage systems, and believes during that time the need for vanadium electrolyte will also likely be at its highest at 40-60 megalitres annually.

Bushveld reckons a new plant in South Africa will be able to produce an initial 5-10ML of this electrolyte, which will equate to 200MWh in annual energy storage.

“By far the main driver of costs (upwards of 70%) is the vanadium feedstock, making locally available, low-cost supply a critical success factor and natural competitive advantage for South Africa,” the company said.

Fortune Mojapelo, Bushveld’s chief executive, added, “There is no longer any doubt about the growth of energy storage globally to gigawatts of annual capacity and billions of dollars in market opportunity.

“Similarly, favourable factors in this industry, such as the move toward longer duration storage, are increasing the demand and competitiveness of VRFBs [vanadium batteries].

“As we have maintained for three years, the largest threat to the success of VRFB technology remains the supply of low cost vanadium feedstock.”

The company added it has also joined the Energy Storage Committee of Vanitec, the vanadium producers’ trade body, which was launched in 2016 to support and promote the global use of the metal in energy storage.

“Following the acquisition of Vametco, we are uniquely positioned to address this challenge”, Mojapelo added.

Next steps will see Bushveld and the IDC complete a bankable business case for electrolyte production, confirming costs and potential returns.