American Vanadium Seeks Partners to Build Batteries for Renewables

American Vanadium Corp., building the only vanadium mine in the U.S., has held talks with Sumitomo Corp. (8053) and United Technologies Corp. (UTX) about using the metal for batteries used to store renewable energy.

“What we really need to find is who has the technology and who’s willing to work with us to develop that technology into a commercialized product in the U.S. market,” Vice Chairman Ron MacDonald said in a Dec. 9 interview in Hong Kong. The Vancouver-based company has also held talks with Prudent Energy Corp. adding there hasn’t been any formal discussions.

Sumitomo and United Technologies both already have capabilities in storage batteries. Vanadium, a mineral traditionally used to strengthen steel, is also used for rechargeable flow batteries that can store wind and solar energy. The energy storage industry may grow to $35 billion by 2020, from $1.5 billion in 2010, according to a February report by the U.S. Department of Energy.

“The idea of a battery industry in the U.S. is extremely compelling,” MacDonald said. “We want to be American Vanadium Battery instead of American Vanadium Mining.”

American Vanadium’s Gibellini deposit, which has a mine life of 10 years, is scheduled to begin production in 2013 and may need as much as $135 million of funding.

“By the time we start construction of mine, I’d like to have at least a letter of intent, agreement in principle,” said MacDonald. The company may raise money in mid-2012 by selling shares and convertible debt, he said.

China “will start securing, globally, lithium, vanadium and phosphate deposits” to meet its energy targets by 2020, said MacDonald. American Vanadium will focus on the U.S. market, he said.

Reducing Energy

China is encouraging solar, wind, and biomass industries to help meet its target of cutting energy use per unit of gross domestic product by 16 percent by 2015. Vanadium flow batteries can ensure that power generated from renewable energy sources is stored and dispatched as needed, MacDonald said.

Vanadium, lithium, and phosphate are used to make rechargeable batteries for electric vehicles, cell phones, and laptops. Vanadium is also used to make titanium alloys, the material needed to build aircraft and missiles.

To contact the reporter responsible for this story: Michelle Yun in Hong Kong at Myun9@bloomberg.net

To contact the editor responsible for this story: Rebecca Keenan in Hong Kong at Rkeenan5@bloomberg.net

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