Largo Resources rebrands into a vanadium energy storage play

(Image courtesy of Largo Resources).

Vanadium miner Largo Resources (TSX: LGO; Nasdaq: LGO) is rebranding to Largo Inc. to reflect its focus from being seen only as a primary vanadium miner to a fully integrated vanadium redox flow battery technology company.

To this end, the company said it has integrated its Largo Clean Energy business back under the same corporate umbrella as it repositions to deliver high-quality, sustainable and innovative vanadium-focused energy storage products alongside its existing premium vanadium products.

“Our new brand and updated positioning are perfectly aligned with our mission to become a leading vanadium-focused energy storage company by satisfying 10% of the world’s long-duration energy storage needs,” co-chair Ian Robertson said in a statement.

CEO Paulo Minsk said the new brand would leverage the existing strength of the vanadium operations in combination with the relatively new vanadium redox flow battery technology to present a “higher-value market opportunity” for investors and create a competitive advantage.

The company’s common shares are expected to start trading on the TSX and the Nasdaq under the new name at market open on November 10.

According to the latest technical report on the company’s flagship Maracas Menchen vanadium mine in Brazil’s Bahia state, reserves in the main Campbell pit will run out by 2028. The company’s latest corporate presentation does not even mention the cornerstone mine.

Analysts also cast a dim view on near-term vanadium price potential.

China is cutting back steel production in a bid to reduce pollution before the 2022 Winter Olympics. According to a recent statement by China’s Ministry of Industry and Information Technology, steel mills in areas around Beijing, Tianjin, and Hebei province are required to slash output during the coming heating season from mid-November to mid-March to reduce emissions. The steel industry accounts for over 90% of vanadium demand.

However, IDTechEx expects the current trend of adoption of redox flow batteries (RFBs) should lead to a multi-billion market in 2031.

The news late in July that Largo has secured its first contract for its VCHARGE± vanadium redox flow battery system is speeding the company’s strategic shift away from mining only. The company will deliver a five-hour, 6.1 MWh system for a project in Spain which start-up is scheduled for the third quarter of 2022.

Largo shares last traded down 0.68% in Toronto at C$14.60, capitalizing it at C$944.3 million ($758.5m) The stock is up about 64% over the past 12 months.