Key points
- Base case after-tax NPV of $842 million, 36% IRR and a four-year payback on about $400 million in pre-production capital.
- Nameplate output of 603,000 metric tons of pig iron and 65,000 tons of vanadium-rich slag a year, or 17,300 tons of contained vanadium pentoxide.
- An offtake partnership with US Vanadium anchors 100% of planned slag production for direct shipment to a US refinery.
Vanadium Resources has confirmed that its proposed V-Iron plant in South Africa can profitably co-produce pig iron and vanadium-rich slag, positioning the project as a long-term supplier of vanadium to the United States and allied markets.
A scoping study for the plant, which would process ore from the company’s 86%-owned Steelpoortdrift project in Limpopo, returned an after-tax net present value of $842 million at base case prices, an internal rate of return of 36% and a projected capital payback of four years.
The ASX-listed company expects the plant to generate average annual EBITDA of about $226 million and roughly $4.4 billion in free cash flow over a 30-year life. Pre-production capital is estimated at about $400 million.
What the plant would produce
The V-Iron plant targets nameplate capacity of 603,000 metric tons of pig iron a year alongside 65,000 tons of vanadium-rich slag grading about 26.7% vanadium pentoxide, equivalent to 17,300 tons of contained vanadium pentoxide annually.
Chairperson Jurie Wessels said the study provides “compelling preliminary validation” of the company’s shift to a pyrometallurgical co-production route.
In his view, that approach offers more robustness and reliability than the hydrometallurgical methods most Western vanadium producers currently rely on.
The project would also lean on existing assets. According to the company, prior mine and concentrator work, infrastructure at the Highveld Industrial Park and established precedent for vanadium-iron co-production all reduce development risk.
A route to market that avoids China
The strategic pitch rests on supply chain security. CEO Nick Diack said the company’s developing offtake partnership with US Vanadium anchors 100% of the planned slag output, with the intermediate product moving directly from South Africa to a US refinery “without passing through, or depending on any, adversarial jurisdiction.”
That matters because vanadium, used in steel alloys and increasingly in flow batteries for grid storage, is dominated by Chinese and Russian supply.
Consequently, Diack argues the transparent route to market makes financing “considerably more achievable” with development finance institutions and partners holding critical minerals mandates.
The immediate priority is funding a definitive feasibility study. Vanadium Resources is in discussions with sovereign development finance institutions and strategic equity partners, and Diack said the scoping results will form the basis for advancing offtake and partnership talks.
Meanwhile, the study’s headline numbers remain preliminary. Scoping-level estimates typically carry wide margins, and the project’s economics will be tested more rigorously at DFS stage before any investment decision.
