Critical Minerals Strategy 2023: discussion paper

2 February 2023

Feedback – Australian Vanadium Limited (AVL) – Australia’s Critical Minerals Strategy

Background and company context

AVL is an emerging vanadium producer focused on the Australian Vanadium Project (“the Project”) in Western
Australia. The company has been listed on the ASX since 2007, with the Project as its primary asset. Vanadium serves a crucial role in the production of structural steel, rebar and high-strength low alloy (HSLA) steels, where small amounts of vanadium provide exceptional improvements in the strength of the final products. The addition of only
100 grams of vanadium per tonne of steel doubles its strength. Stated another way, 200 grams of vanadium foregoes one tonne of steel production and all associated carbon emissions. CO₂ savings from using vanadium high-strength low-alloy steel equate to those gained annually by planting approximately two hundred and sixty million trees 1. It is vanadium’s role in HSLA for space vehicles, nuclear reactors and aircraft carriers which gives it its critical mineral status.

Whilst AVL’s approach has been underpinned by the steel market with its increasing demand for vanadium, the long- term viability of the Project is being secured by delivering products to both the steel and battery markets. AVL’s vision is to supply its high-grade product to battery makers worldwide, a market expected to grow significantly on the back of increased renewable energy generation. The company is building its first electrolyte manufacturing plant in WA to deliver vanadium electrolyte to vanadium redox flow battery (VRFB) projects in Australia. Through its 100% owned subsidiary, VSUN Energy, AVL is developing the vanadium redox flow battery (VRFB) market in Australia.

AVL has released a bankable feasibility study (BFS) for the Project and is planning an integrated vanadium production operation in WA to refine vanadium ore and produce vanadium products required for battery and steel applications.
AVL’s processing plant can become a hub to process concentrate from other vanadium deposits, with the ability to turn WA into a leading global vanadium producer during and beyond the 25 year life of AVL’s mine.

Figure 1 Project Location

1
https://pubs.rsc.org/en/content/articlelanding/2021/em/d0em00424c ‘Punching above its weight: life cycle energy accounting and environmental assessment of vanadium microalloying in reinforcement bar steel’
Staff members Todd Richardson (COO) and Samantha McGahan (Marketing Manager) appreciated the opportunity to attend the Critical Minerals Strategy roundtable in Peth. The following feedback provides further input to the strategy’s development. Managing Director, Vincent Algar, will be attending the roundtable hosted by Minister King in February.

Feedback

1. How can Australia capitalise on its existing advantages to create economic opportunity for all Australians –
particularly regional communities and First Nations Peoples?
a. Supporting downstream industries including innovators who might be too small to leverage a lot of
the support larger companies can access.
b. Supporting not-for-profit agencies that work in regional communities, having the twofold benefit of
attracting employment to regional communities and assisting those communities to increase
economic wellbeing. A lot of problems regional towns have is in attracting families to live in them,
to attend the local school, to build that economic and social infrastructure.
2. What could be done to facilitate project development and ensure benefits flow to regional communities?
a. The NAIF boundary is currently arbitrary. Making the focus to be on regional rather than purely
‘above the line’ would help regional communities and First Nations Peoples to leverage the funding
available to activate projects in those regions.
b. Federal, State, local Government and business should collaborate provide the necessary
infrastructure in local towns to attract and support industry.
c. Planning for hospitals, schools, housing, services etc in advance.
d. Helping to make regional locations attractive places for people to want to live and work in.
3. What might be done to ensure maximum reasonable opportunity for local employment and local business
participation in projects?
a. Skills shortage – utilising TAFE etc to prepare people to be in the labour force for the required roles.
b. Supported apprenticeships.
c. A key issue is literacy – face to face, Aboriginal-appropriate adult literacy courses.
d. Support for the small businesses that can support mining companies with increasing expertise. How
do you encourage a company in a major city to open a business in a regional town? Maybe a tax
break for property or payroll or other.
4. What role can Government play to help ensure the sector maximises gender equality?
a. Providing input into STEM education at primary school and through high school, providing teaching
resources and training to teachers in engaging both genders in the subjects and understanding the
pathways to the mining industry.
b. Safe TAFE apprenticeships – ensuring there is a positive environment for female participants.
c. Scholarships for universities.
d. Mentoring programmes to enable women in the mining industry to be connected with younger
generations – working with existing organisations such as Women in Mining.
5. How can the Government help the Australian critical minerals sector move up the value chain?
a. Enabling or encouraging a royalty structure that makes it more financially beneficial to add value in
Australia.
b. A matchmaking service for companies within the value chain of each critical mineral (eg Austrade).
c. Supporting commercialisation of inventions that either support or utilise critical minerals (eg ARENA
– making ARENA less cumbersome to deal with and widening their remit).
d. Downstream production is typically more complex and requires skillsets that aren’t readily available
in the workforce. They are typically energy intensive and require large capital investments.
Therefore, the Government should align all the criteria that it uses for investment across the
departments such as EFA, NAIF, CEFC, ARENA and various grants to be heavily weighted to
support downstream processing projects.
e. Government procurement should encourage supply from Australian producers who are undertaking
downstream processing, or products using their materials.
f. Tax breaks or royalty concessions for projects with downstream processing in Australia.

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6. What more is required to support strategically significant projects overcome barriers to investment?
a. Risk tolerance of CEFC and NAIF should be higher than commercial debt.
b. Making the application process for funding more streamlined, less paperwork. At the moment the
financial advisors and legal advisors required for funding applications can make it economically
unfeasible to pursue the funding.
c. Australian Government funding commitment does attract domestic and international investment, so
it needs to be there early. In opaque markets, insisting on offtake agreements is not conducive to
early commitment.
d. Long timelines for approvals discourages equity investment.
e. Streamline the debt process and allow agencies to sign agreements or non-binding letter of support
which would help provide certainty to potential investors.
7. What role can Government play in building links between national science agencies, industry and academia
to advance critical mineral processing capabilities and new, world-leading IP?
a. Having a team whose responsibility it is to track work being undertaken in public and private facilities
and join people together where there are opportunities to collaborate. Helping to put people in contact
with others for commercialisation. For example, the Electric Mine Consortium is undertaking work
across several mining companies to try to increase electrification of mines. They won’t know all the
work that is being done across the country, but if there was an up to date database they could be
connected to relevant parties.
b. CRC-P is a successful program. It tends to work better than the CRC as the IP issues are easier to
manage.
8. What are the specific opportunities Australia should seek to realise while developing downstream processing
and manufacturing capabilities?
a. Increased skillset within the country.
b. Opportunity for processing hubs and shared infrastructure.
9. For key technologies and value chains, such as batteries, magnets, alloys and other clean energy
technologies, what are the key obstacles to Australia moving up the value chain?
a. Operating costs, specifically the cost of power and labour – must be competitive.
10. How can governments, industry, and researchers support Australia’s critical minerals industry to move further
downstream and develop new sovereign capabilities?
a. Helping to bridge the pathway from invention to commerciality, discouraging inventions and IP from
being sold overseas for development.
11. What can Australia do to better develop and retain IP and to attract IP investment from like minded partners?
a. Promote Australian capabilities in IP internationally.
b. Establishing a team that works with research institutions to take research through to
commercialisation.
c. Encourage entrepreneurship.
12. How can Australia contribute to supply chain diversification?
a. Building relationships with a range of end user countries.
b. ESG is strong reason for investment in the supply chain from Australia, but we need to ensure that
this also remains aligned with economically viable business outcomes.
13. How can Australia leverage its international partnerships and collaborations to support Australia’s critical
minerals projects?
a. Austrade does a fantastic job, so continuing to support Austrade and develop those relationships is
crucial.
b. Advice from the Government about how to leverage financial support from mechanisms such as the
US Inflation Reduction Act.
c. Matchmaking – helping to identify the end customers who could buy Australia’s critical minerals and
actively putting them in contact with Australian companies.
14. How can government support the capability of critical minerals companies and other relevant entities to
identify, engage and grow new target markets?
a. As above re Austrade.

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b. Leverage connection with other governments through the defence supply chain to identify areas for
Australian supply.
15. How should Australia engage with international partners to support the diversification of supply chains? What
should this engagement focus on (including which countries)?
a. Communicate what’s available in Australia.
b. US, UK, Europe, Japan, Korea, India
16. What actions can Australia take to ensure it leverages related investment by other countries, for example the
US Inflation Reduction Act.
a. Advice from the Government about how to leverage financial support from mechanisms such as the
US Inflation Reduction Act. At the moment we hear about these initiatives in the news, but it is hard
to get to the actual way that a company can try to leverage them.
17. Is there more the Australian Government can do to facilitate business-to-business engagement and drive
supply chains diversification?
a. Yes, as previously mentioned, mapping customers around the world and actively introducing to
Australian companies.
18. How can Government and business work together to ensure private sector insights on the context and
complexity of current supply chains and markets can inform policy design?
a. Discussions like this are a good start.
b. Bring industry professionals/experts and the Critical Minerals Office together.
19. What are the opportunities for critical minerals projects to maximise their ability to support clean energy
supply chains and technologies?
a. Legislating local procurement requirements that go further up the supply chain. Batteries, for
example, could need to have x% of locally produced minerals in them – or if they do, they could have
a better loading in a tender.
b. Downstream processing.
20. How could the Australian Government help industry address capability barriers to supporting clean energy
supply chains for critical minerals projects?
a. Easy visas for people with the right skill sets who will help build the industry and pass on their skills.
21. How can the Australian Government support the sector’s integration with key clean energy supply chains,
both domestic and international?
a. Subsidise technologies such as battery storage until the market is mature and the cost comes down.
b. Matchmaking opportunities.
22. Should ESG credentials including circular economy, recyclability and traceability tools form part of the Critical
Minerals Strategy?
a. Business is building a strong ESG capability.
b. Critical Minerals Strategy should consider how to leverage Australia’s strong ESG capabilities.
c. Government should consider ESG information in financial decisions.
d. There is no requirement for the Critical Minerals Strategy to have these tools incorporated into it as
there are globally recognised frameworks that companies can use.
23. Note re environmental approvals, quote from page 19 of the discussion paper ‘Environmental approvals that
are fast and reliable, but which provide excellent protection of biodiversity and our natural resources, are
crucial to ensuring our projects are both competitive and globally recognised as responsible and sustainable.
a. This statement is correct, but not necessarily applicable to Australia at the moment. The approval
process can be long, frustrating and expensive. In addition, because the process takes so long,
legislative requirements often change, resulting in further re-work and delays. One suggestion to
improve timeframes is to outsource the initial review to consultants who have the capacity to review
and ask for additional information in a short timeframe. The approval can then move on without
waiting for the government department to undertake the initial review, allowing them to focus on
applications which are ready for approval.
b. The EPA referrals process in WA requires typically two years’ worth of preparatory work, another 6-
12 months in the ERD process, then 12 months from the final submission to approval.
24. How can the Government build genuine partnerships with First Nations Peoples?

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a. The Government needs to have strong engagement with the people working in towns like
Meekatharra who are able to give feedback about real action that can be undertaken to close the
gap. AVL works with the Stephen Michael Foundation and Shooting Stars who are both engaging
with children in the town from an early age to engage the children in school and sport. The Stephen
Michael Foundation has a full time employee from Meekatharra based at the High School who works
with the children and provides another well needed role model. Talking to agencies such as Mission
Australia who see the day to day issues that the Aboriginal people in the town face would help to
find ways to improve their lives.
b. The National Indigenous Australians Agency set up a group in Meekatharra which included all the
resources companies who work in the area. The goal was to find job opportunities and work out
pathways for local people to build up the skills they needed to work for any of the companies. Bringing
the resource companies together enabled a joint effort and a way to have local skilled people
available. The Meekatharra Industry Group was nascent and had made some good progress, but
funding for NIAA and changed priorities meant that the group collapsed. Having a longer view on
this type of engagement and making it a national structured program would be very useful to create
genuine partnerships.
25. What more can Australia do to ensure we are the international best practise jurisdiction for ESG?
a. We are doing a great job, but we need to communicate better.
26. What role can Government play in supporting the critical minerals sector ensure workplaces are safe and
inclusive, and can attract and retain underrepresented cohorts, such as women?
a. Education from primary school onwards about diversity and inclusion.
b. Workplace education programmes.
27. How can Government and industry create meaningful engagement with First Nations Peoples and ensure
critical minerals projects benefit their communities?
a. Engaging with First Nations People who have a genuine interest in benefitting communities across
Australia.
b. Ensuring that those who work for Aboriginal corporations are upholding the best interests of those
they are working to help, not just ‘feathering their own nests’.
28. What are the opportunities to further strengthen the ESG credentials of the sector? For example, helping
industry showcase their high ESG projects or support enabling capabilities such as the adoption of mineral
traceability measures.
a. An Australia-made type branding would be good.
b. Be careful not to hamstring ourselves with regulation – needs to be sensible and rational.
29. What are the opportunities for Australia in increasing recycling and circular economy practices in the critical
minerals sector?
a. From a selfish perspective, it’s worth noting that vanadium doesn’t get consumed when used in
electrolyte, meaning that at the end of the battery’s mechanical life, the vanadium remains usable,
either in another battery, or it can be removed from the solution and used in the steel market. Just
borrowed from future generations.
30. Are there any other factors or issues the Government should consider in developing the new Critical
Minerals Strategy.
a. Nothing further to add.

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