By cooperating with Chinese engineering company, Ferro-Alloy Resources plans to reduce the total cost of the work by 40%.

Ferro-Alloy Resources has agreed terms with China National Chemical Engineering Sixth Construction (CC6) for front-end engineering and design for its Balasausqandiq vanadium project in Southern Kazakhstan, according to a company statement.

CC6 has provided an indicative construction cost estimate of US$261M, which would reduce the total funding required to US$311.9M or approximately 40% lower than the US$520M outlined in the project’s feasibility study completed last month.

The revised capital expenditure estimate would enhance the project’s internal rate of return to 31% from 22% previously.

The companies are negotiating to expand the scope to include modifications to produce higher-purity vanadium oxides that are suitable for vanadium flow batteries (VFB), used in renewable energy storage.

The Balasausqandiq deposit contains an estimated mineral resource of over 70Mt across ore-bodies 1-5. The main focus of current development is ore-body 1, which has been the most extensively drilled and has the largest indicated resource of 32.9Mt with the highest vanadium grades of 0.62% V2O5. The project is planned to be developed in at least two phases, with Phase 1 processing 1.65Mtpy.

According to Project Blue, the Balasausqandiq project, coming on stream by 2028, and Australian Vanadium, are among the few that are economically viable to be commissioned. We forecast that the main driver of vanadium demand over the coming years will be the rapidly growing VFB segment, primarily in China.

Under our base case, vanadium electrolyte facilities maintain a steady rate of capacity utilisation growth through to 2035. In line with this, vanadium demand in VFB reaches over 30ktpy V globally by the end of the forecast period, up from around 10ktpy V at present.