Australian Vanadium Limited (AVL) has signed a non-binding Letter of Intent (LOI) with Hong Kong based Shenglong Metallurgy International for offtake of the iron titanium (FeTi) coproduct to be produced from its flagship Australian Vanadium Project.
AVL plans to produce 900,000 tonnes per annum (tpa) of FeTi coproduct from the Australian Vanadium Project, in addition to 11,022 tpa of vanadium pentoxide from its proposed mine and processing facility in the Mid West region of Western Australia.
Shenglong Metallurgy, which produced 12.06Mtpa of steel in 2020 at its steel mill in southern China’s Fangchenggang port, mainly imports its iron ore raw material from overseas due to its proximity to one of the largest iron ore ports in China.
AVL said in a statement that the LOI is non-binding and its intention is to record the interest of the buyer to support the development of the Project and for the parties to negotiate and agree a binding ore sale contract.
“Negotiations will commence at a mutually agreed timeframe, subject to the progress of the Project,” reads the statement.
AVL’s Managing Director, Vincent Algar, said the parties intend to finalise the ore sale contract in 2023.
“This first LOI demonstrates the marketability for AVL’s FeTi coproduct among the steel makers.” Mr Algar stated.
“Work is actively progressing on additional LOIs which will lead to binding agreements.
“This agreement further validates AVL’s strategic decision to locate the vanadium processing plant close to Geraldton’s port, strengthening the AVL pathway to funding and project development.”