Neometals (LON: NMT) is running an entirely achievable vanadium recovery project. We know this is achievable because other people do much the same thing. It's one of the oddities of that vanadium market that while the major current use is in steel it's also the making of iron that is a major source. By processing the status of using vanadium rich iron ore it is possible to reclaim the vanadium pentoxide which is then the starting point for vanadium enriched steels. No, sadly, just leaving the vanadium in the iron ore doesn't get it through and into the steel in the correct quantities.
So, given that this is where much of the world's vanadium comes from we're clearly aware that this is a viable source of Vanadium supply. Find a blast furnace operator that does not retrieve the V in the process and work with them to do so. This part of the Neometals process is obvious. The numbers look reasonable enough, the feasibility study shows a positive net present value which is the usual starting point for considering whether a project is actually worth doing.
Neometals share price from London Stock Exchange
Thursday's announcement is that Neometals is increasing its ownership of that Vanadium Recovery Project. If we assume that the project has a positive value then owning more of it is a good thing.
However, there's one more thing to consider with Neomet. Which is that the idea is also predicated on there being an increasing demand for vanadium. More, that this is going to be in a large and new market. Specifically, in grid scale batteries. There are vanadium chemistries which look like useful sources of such large scale batteries - in many ways much better than lithium. For this specific use that is - vanadium batteries would not be useful in cars. Which exposes all to risk of course. For while we can speculate about what battery technology will dominate this area - or even, whether a battery will be used at all, there are entirely separate chemistries possible like hydrogen or e-fuels - we don't actually know what that technological future holds. Neometals' value therefore depends, to some extent, not on the process to extract vanadium but the arrival of that vanadium battery technology as a large scale phenomenon.