Ferro Alloy Resources (LSE:FAR) - Low-Cost Vanadium Play Preps Feasibility Study for June 2025

Feb 18, 2025

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Interview with Nicholas Bridgen, CEO of Ferro-Alloy Resources Ltd.

Recording date: 14th February 2025

Ferro Alloy Resources is developing a significant vanadium project in Kazakhstan, positioning itself as a potential leader in both the vanadium market and sustainable carbon black production. Under CEO Nick Bridgen's leadership, the company is advancing toward a feasibility study, expected by June 2025.

The vanadium market, currently at 125,000 tons annually, is characterized by significant price volatility, with prices ranging from $30 to $5 per pound in recent years. While steel production remains the primary demand driver, accounting for 85-90% of consumption, the emerging vanadium redox flow battery (VRFB) sector presents substantial growth potential. China's announced VRFB projects alone could require an additional 100,000 tons of vanadium.

A unique aspect of Ferro Alloy's project is its carbon black substitute (CBS) co-product. The company's vanadium-rich ore contains 8-14% naturally occurring carbon, which can be concentrated to 40% purity through a low-energy process. This CBS offers a sustainable alternative to traditional carbon black, a $20-30 billion global market where conventional production emits approximately two tons of CO₂ per ton of product.

The company's CBS innovation provides three key advantages: cost efficiency (priced at $500/ton, half the cost of traditional carbon black), minimal CO₂ emissions, and performance capabilities. Testing shows CBS can replace up to 10% of traditional carbon black in tire sidewalls without performance loss. The Phase 1 project aims to produce 220,000 tons of CBS annually, potentially generating $110 million in revenue.

Ferro Alloy's strategic location in Kazakhstan positions it well for diversifying vanadium supply away from China and Russia, key considerations given current geopolitical dynamics. The company's project stands out for its potential to be the largest and lowest-cost vanadium producer globally, with significant expansion potential across seven ore bodies.

The investment thesis centers on dual exposure to vanadium's growth potential in steel and energy storage markets, coupled with the innovative CBS opportunity. The CBS revenue stream could provide a hedge against vanadium price volatility, while the project's low-cost profile and strategic importance enhance its financing prospects.

Looking ahead, the completion of the feasibility study will be a crucial milestone, providing detailed economics for Phase 1 and insights into the broader resource potential. The company's approach to both vanadium production and sustainable CBS manufacturing aligns with global trends toward renewable energy and reduced emissions, particularly in steel production and energy storage.

Learn more: https://www.cruxinvestor.com/companies/ferro-alloy-resources