Investing for the Future Vanadium Demand Drivers

Vanadium developer Multicom Resources CEO Shaun McCarthy speaks with The Capital Network’s Executive Director Lelde Smits about the future demand drivers for vanadium.

Lelde Smits: Hello, I’m Lelde Smits for The Capital Network and joining me in Brisbane is the CEO of Multicom Resources, Shaun McCarthy. Shaun welcome.

Shaun McCarthy: Thank you Lelde.

Lelde Smits: Multicom Resources is a mining company that is developing a vanadium asset here in Queensland. Why are you bullish about the prospects for vanadium?

Shaun McCarthy: At the moment we only really have to look at the vanadium price and the fact that it’s gone up over 500% in the last few years to at least get a little bit excited about vanadium. But it’s the supply and demand and dynamic we are seeing that is really underpinning that change in price. That’s what gets us most excited.

Lelde Smits: That is a huge gain that you are talking about. What factors have even underpinned the recent gains in the price of vanadium?

Shaun McCarthy: Quite simply, over 91% of the world’s vanadium is used in steel production. We’re seeing the supply of vanadium, from China largely who is producing half of the world’s supply. We’re seeing that supply constrained through environmental regulations. What we are also seeing at the same time is demand going up, and also, driven by economies such as China where they are increasing the amount of vanadium and they are using in every tonne of steel. Uses such as construction reinforcement bar and other uses for steel such as in aircraft, electric vehicles and beyond. The outlook for vanadium in the demand space is quite exciting.

Lelde Smits: Certainly, in the current day that’s an explosive demand and, as you mentioned, enough to get very excited about. Looking ahead perhaps in the longer term, what emerging technologies or industries will be supporting demand for vanadium?

Shaun McCarthy: One of the ones that is most talked about at the moment is the vanadium redox flow battery. Flow batteries are a fantastic technology that are well suited to grid scale storage and are probably going to be seen on a lot of the new renewable projects that are likely to be installed or are being installed globally.

Lelde Smits: It’s not doubt why people are getting in interested in this commodity, vanadium, but as they’re looking to invest in assets or in companies, what would you be advising the investors to lookout for?

Shaun McCarthy: Well like most mining stocks, the one thing to look at is the quality of the resource and how well understood the resource is. For instance, with Multicom Resources’ Saint Elmo project, we’ve got a well understood resource, a JORC compliant large-scale resource. Beyond that, you look to the team. Who have the company put together as their team that are going to guide this project and the company through its various developments. And we believe at Multicom we’ve got a strong executive team that we’re driving this project from the ground but supported by a very well experienced board as well that are guiding us.

Lelde Smits: Fantastic and final question, globally speaking, where are we seeing production come from for vanadium and who’s likely to support the demand in terms of meeting the demand moving ahead?

Shaun McCarthy: A lot of the demand is going to need to be made up of new projects and I guess, that’s why the Saint Elmo project is well positioned. And there a number of other players globally that are looking to bring new production to market. But without that, what you are probably going to see is continued supply constraint and this deficit that has already been created. We’ll see how that impacts the price long-term but we expect the outlook to be quite positive.

Lelde Smits: Excellent, thank you for the insights and certainly, a commodity to watch in the future.

Shaun McCarthy: Certainly, thank you Lelde.


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