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Australia-listed Vanadium Resources (VR8) has announced two new developments towards the company's VR8 Steelpoortdrift vanadium project in South Africa becoming a long-term vanadium supplier.

Firstly, VR8 has entered into a nonbinding offtake term sheet with US Vanadium Holding Company (USV), a majority-owned portfolio company of TechMet.

This agreement covers 100% of the vanadium-bearing slag production from VR8's proposed critical minerals smelter, the V-Iron Plant. US Vanadium is a producer of high-purity vanadium specialty chemicals, and recent metallurgical testing has confirmed that the slag from VR8's Bushveld Complex ore is ideally suited for its production facility.

This partnership positions VR8 to strengthen supply chains for critical minerals.

Additionally, VR8 has appointed Rand Merchant Bank (RMB) as its exclusive financial advisor and capital sourcing agent.

RMB will help secure funding for the construction of the project's processing facilities, including both concentrator and pyrometallurgical beneficiation units.

With RMB's expertise, VR8 is well-placed to advance the development of its deposit and establish itself as a cornerstone asset, VR8 executive chairperson Jurie Wessels stated in a media release to Mining Weekly.

Vanadium is used extensively in defence and aerospace applications. The Steelpoortdrift project contains 4.74-million tons of V2O5 and the V-Iron Plant will be designed to optimally process Steelpoortdrift's high-grade VTM ore and co-produce vanadium-rich slag and pig-iron, drawing on established metallurgical practices used at Highveld Steel and Vanadium (South Africa), Chengde and Panzhihua (China) and Kachkanar (Russia).

The production pathway, which will be investigated through an upcoming feasibility study, mitigates against vanadium price volatility and captures maximum value from the suite of minerals within Steelpoortdrift's ore.

VR8 is in active discussions to acquire brownfield sites that host, or have previously hosted, large-scale pyrometallurgical operations with existing utility infrastructure and environmental footprints to potentially materially reduce project readiness timelines and capital requirements of the envisaged V-Iron Plant.

"The shifting pricing landscape for vanadium reinforces the need to move away from single-product models and to avoid feeding into markets that destabilise supply and pricing. By adopting a processing route already proven in South Africa, the full suite of metals contained in our orebody can be extracted. This approach stands to strengthen VR8's economics, diversify our revenue base," Wessels explained.

The availability of nearby brownfield pyrometallurgical infrastructure, combined with emerging renewable-power capacity, makes the development of a V-Iron Plant both practical and compelling. Through the production of vanadium rich slag, which is historically the preferred feedstock for US vanadium operations, and the supply of pig iron to new steel producers in South Africa, which are replacing legacy producers, VR8 sees the foundations of an integrated mine-to-metal value chain.

VR8 CEO Nick Diack described the USV term sheet as representing a significant step forward in the commercialisation of Steelpoortdrift as a leading vanadium deposit and reflecting the depth of technical and strategic work completed by the company to date.

"The co-production approach to ore processing has proven both historically and currently to be the most successful and sustainable manner in which to produce significant quantities of vanadium.

"We strongly believe that this approach, coupled with partnering the leading US vanadium processing and distribution company has the potential to cement VR8 as the west's leading miner and suppli...