Australian vanadium firms target production by 2027

Two Queensland-based vanadium developers are aiming to begin upstream production of vanadium pentoxide (V2O5) by next year to benefit from the rapid growth in global battery storage demand.

One of the developers, Vecco Group, already began midstream production of vanadium electrolyte at its 35 MWh/yr Townsville pilot plant in 2023, and is planning to expand production to 300 MWh/yr by 2028 (see table). The company is planning to begin production of V2O5 at its 8,700 t/yr Debella mine by next year.

A second developer, Richmond Vanadium Technologies (RVT), is also aiming to reach production of V2O5 at its 12,701 t/yr Lilyvale mine by 2027.

Meanwhile, a third developer, Critical Minerals Group (CMG) is aiming to begin production of V2O5 at its 10,577 t/yr Lindfield mine by 2030. It plans to first begin production of vanadium electrolyte at its 24mn litre/yr (350 MWh/yr) Parks Special Activation Precinct (SAP) plant in New South Wales state by 2028 using V2O5 feedstock from third parties.

There are six active developers in Queensland including Vecco, RVT, and CMG, while others are still early stage explorers or have not announced production timelines. A seventh developer, QEM, has suspended work at its Julia Creek mine due to "processing flowsheet challenges and high capital costs [which make it] commercially unattractive in the current market," the company told Argus on 28 July.

Global supply and demand

China currently accounts for most of global vanadium supply and demand. China produced 73pc of global V2O5 production in 2025, according to the 2026 US Geological Survey.

Vanadium's key end-use application is in vanadium redox flow batteries (VRFB), which have technological advantages over lithium-ion batteries, particularly when deployed at scale. VRFB are inflammable, do not suffer significant performance degradation, contain 99pc recyclable vanadium content, and have three times the storage duration of lithium-ion batteries.

Global battery storage increased by 108 GW in 2025, 40pc faster than in 2024, with China accounting for 60pc of installations, the International Energy Agency (IEA) said in its 2026 Global Energy Review.

The IEA predicts battery capacity will grow from 86GW worldwide in 2023 to 760-1,200GW by 2030, and 2,000-3,500GW by 2040 depending on policy settings.

Data centres will be a main driver for battery storage growth globally, accounting for 50pc of electricity demand growth by 2030 in the US, according to the IEA. Although not all data centres will be powered by renewables, large scale battery energy storage systems (BESS) will be used to bridge the intermittency problems of solar and wind power to allow renewable-powered data centres.

In Australia, the Western Australian (WA) government has tendered applications for a A$150mn ($105mn) 50MWh vanadium BESS.

But while the demand case for VRFB is relatively clear, it remains to be seen whether Australian companies can meet this demand at a competitive price without additional government support.

Pricing assumptions and challenges

CMG outlined V2O5 pricing assumptions of $5.90-8.70/lb for the first 25 years of its mine in a pre-feasibility study on 20 July.

Meanwhile, QEM had an assumed price of $11.56/lb in its 2024 scoping study before declaring the project no longer viable in 2025.

These assumptions are above the upper end of Argus-assessed V205 fused flake min 98pc du Rotterdam, which was at $5.50/lb on 28 July (see graph). They are also well above V2O5 98pc prices ex-works and fob China, which were both flat at $5/lb and $5.15/lb respectively on 29 July.

The rising price of sulphuric acid poses another problem for CMG. The company plans to purchase 1mn t/yr of sulphuric acid and produce a further 3mn-4mn t/yr on site by burning imported sulphur prill. The project will remain financially viable if sulphuric acid prices do not increase more than 20pc from current levels, the company said.

Argus-assessed sulphuric acid fob China prices surged by 178pc to $382.50/t in June because of supply tightness caused by the US-Iran war, but have since dropped to $345/t on 30 July due to widespread demand destruction. Sulphuric acid price volatility could continue to pose a risk for Australian refining operations.

Significant government support is likely necessary for the industry to get off its feet.

The Queensland government has built an A$115mn common user facility to de-risk projects and encourage refining in Australia, which will position Townsville as a "globally competitive hub for critical minerals processing," Queensland's natural resources and mines minister Dale Last told Argus on 18 July.

Queensland will invest a further A$52.5mn in critical minerals in 2026-27, Last added, but he did not specify which projects would receive funding.

Vanadium developers can pay the government a usage fee to rent out the facility, but fees are decided on a case-by-case basis depending on usage intensity and are commercially confidential, the government said.

Vecco is the only vanadium developer to sign onto the facility so far. The five other Queensland-based vanadium developers did not respond to a request for comment about whether they planned to use the facility, or whether the QRCUF represents an adequate level of government support for their operations.

By Daniel Gage-Brown

Vanadium pentoxide prices 2025-26 ($/lb)