Best Vanadium Stocks to Buy

Best Vanadium Stocks to Buy: Investing in precious metals is one of the ways that investors attempt to capitalize on trends. For example, someone who believes that electric cars are the future may choose to invest in cobalt because that substance is used in the batteries that power those vehicles. Vanadium could be one of those trends worth a closer look.

What is Vanadium?

Vanadium has been a known metal since 1801 but many of the ways the material is used are much more recent.

It is collected as a byproduct from mining other metals and minerals, including uranium, sandstone, coal, and oil. One of the metal’s most common uses is steel alloys. Vanadium helps make steel stronger.

Right now, 91% of the vanadium produced goes towards steel alloys but it does have many other uses. For instance, it plays an important role in nuclear reactors.

The versatile substance also makes an appearance as a ceramics pigment and in certain medications.

Vanadium may be included in treatments for everything from diabetes to high cholesterol. However, what makes this material extremely attractive right now is its use in batteries.

New Uses for Vanadium

Vanadium has been used in the battery cathodes of implanted defibrillators for some time, but recent research is finding new uses for the material in renewable energy.

The metal could be used in the battery cathodes of electric vehicles, and it can help make windows smarter. Specifically, the unique properties of the metal can retain heat in the winter and block heat in the warmer months.

However, this magic substance also has a place in power.

Vanadium Redox Flow Batteries (VRFBs) are non-flammable, reusable, and easily scaled. They offer uninterrupted power supply and have a lifespan of 20 years or more. This combination of factors makes the batteries good for a variety of sustainable energy opportunities, including solar, microgrid, wind, and microgrid uses.

“The beauty of the vanadium redox battery is that you can charge and discharge it at the same time, something that can’t be done with a lithium battery,” says Robert Friedland, founder of Ivanhoe Mines.

“With a vanadium redox flow battery, you can put solar power and wind power into the battery, and you can put excess grid power into the battery at night, and at the same time you can have a stable output into the grid.”

Are Vanadium Stocks Valuable for Your Portfolio?

Most of the vanadium in the world comes from China. The country has the highest reserves of vanadium in the world. China produces 40,000 metric tons of the stuff every year.

Russia is the next prominent producer of vanadium, with 18,000 metric tons, followed by South Africa with 9,100 metric tons. These countries have obvious import issues and tariffs to consider.

Vanadium batteries also deserve some discussion. They have many pros to offer, but they are also enormous compared to other battery options.

Their size makes them better suited for stationary applications, like industry, as opposed to electric vehicles.

Of course, that’s not to say that vanadium won’t figure in the energy markets going forward. The substance has too many advantages to be ignored and the stationary energy market is booming.

It is expected to increase eightfold from 2017 to 2026. Vanadium could see some real growth as that industry develops.

How to Invest in Vanadium

Investors can put money in vanadium bullion, but we wouldn’t recommend it. The substance is not publicly traded. Instead, the better idea is to invest in the companies that mine the product.

Let’s take a closer look at three vanadium mining companies: First Vanadium (FVAN), Vanadium One (VONE), and Largo Resources (LGORF).

Should You Invest in First Vanadium?

First Vanadium was previously known as Cornerstone Metals. It changed its name in 2018.

First Vanadium is putting most of its focus on the Carlin Vanadium Project located in Nevada. The mine boasts the “largest highest grade primary Vanadium deposit” in North America per a recent investors report and First Vanadium has exclusive rights to the site. The grade of the vanadium is a value point, but the location of the mine is key.

Most vanadium comes from China. In addition to tariff issues related to the country which have elevated prices of the substance, China has also experienced some environmental issues which has caused the closing of some mines. The Carlin mine – First Vanadium’s mine – is the only domestic supply of vanadium in the United States. This means no tariffs to consider and easy transportation.

Is Vanadium One Undervalued?

The full name of Vanadium One is Vanadium One Iron Corp. It used to be called Vanadium One Energy Corp, but the company changed its name.

Vanadium One puts its focus on the Mont Sorcier project in Quebec. The project is still under development. It isn’t due to be completed until early 2020. The mine is expected to have a 25-year life. Plus, the district where the Mont Sorcier is located is well-established, hydropower is available, and there are two deep water ports nearby.

Add to that a location in Canada instead of overseas, and the mine may not be domestic, but it is well-positioned and potentially very lucrative. Vanadium One has other projects in Canada, including Ivanhoe in Ontario and Clinton in British Columbia. It also operates in Mexico, with an interest in San Miguel.

Largo Resources, Buy or Sell?

Largo Resources focuses its efforts on mining and development in Brazil and Canada. Most of its efforts are going toward the Maracás Menchen Mine in Brazil. This is significant because the mine is very large and contains some of the highest percentages of vanadium in the world. Its reserve grade is twice as high as the industry average and it carries one of the lowest costs to mine. Plus, Largo has a deal in place with Glenmore to take 100% of the vanadium produced. It is a strong proposition.

Largo has a few other projects as well. There are two in Brazil – iron-vanadium in Campo Alegre de Lourdes and tungsten in Currais Novos. Largo also owns a tungsten-molybdenum project in Canada’s Yukon. What separates Largo from so many other options is that it owns 100% or virtually 100% of its mines and the company focuses on establishing sales agreements.

As long as Largo can keep its operating costs low, it has a strong value proposition. However, cost control is always a challenge, especially where mining and imports are concerned.

Best Vanadium Stocks to Buy Summary

Vanadium is currently in oversupply. The basic laws of economics – supply and demand ­– dictate that the spot prices for the substance will fall. However, this dip may be temporary. Right now, steel is the primary driver of vanadium demands but that reality is changing. The need for sustainable and renewable energy storage is very real.

The challenge is whether or not vanadium is the solution. It could happen that the projected boom for the material never comes to pass or, if it does, that another metal option takes the place of vanadium.

Investing in vanadium now is risky, but like any new technology or disruptive trend, it is the type of risk that also comes with a big reward if your gamble pays off. Before you invest in any vanadium mining stock or otherwise try to play the trend, do your research and stay aware of trends in the industry.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.