Part of my investing strategy has been to invest around the theme of electrification, more specifically all those raw materials that go into the electrification process. We all know about copper, cobalt, lithium, nickel, graphite etc but has anyone ever heard about Vanadium?
Traditionally vanadium has been used in steel alloys to make them stronger especially in the aerospace, nuclear and construction industries. ''''Vanadium-titanium alloys have the best strength-to-weight ratio of any engineered material on earth.''
If you're thinking about Captain America's shield… that's made out of Vibranium… a close cousin!
More recently, vanadium is being used in VRFB or Vanadium Redox Flow Batteries to store electricity that is produced from solar and wind farms. VFRB's can be both on or off grid which makes them great for rural based electricity storage. They are non flammable which is great for urban settings. VFRB's are usually big and bulky but technology is looking to decrease the size and weight. There is research going on now as we speak to use them in car batteries.
VRFB's have significant advantages over more traditional Lithium batteries:
- Much longer lifespan = 20+ years
- Non flammable
- Can discharge 100% with no damage to the battery
- Can store energy for long lengths of time without degradation
- VRFB energy storage guarantees uninterrupted power supply
- Can release energy immediately
- Suitable for both on and off grid settings
- Great for commercial use
- Great for charging stations
- Great for residential use
- Better performance in lower temperatures
I think that with the Inflation Reduction Act, there will be a lot more interest and investment into VFRB's. I am specifically looking at one company that may benefit from all this investment… Largo Inc or LGO.
LGO produces Vanadium from its mine in Brazil while it's clean energy operations are based in the US. They supply Vanadium flakes for use in steel alloys as well as Vanadium powder for use in VRFB's. They manufacture a VRFB which is marketed as VCharge for use in industry. ''The VRFB stands out as the leading battery for large-scale energy storage.''
SP: $6.82
P/E 34.05
Earnings: Mar 17
There are currently three analysts covering LGO right now with a communal PT of $12.81. That's 87% upside. LGO peaked in 2018 at approx $35. I think with the emphasis on electrification and those metals involved in it, LGO could reach these levels once again, especially with widespread adoption. I envision every household someday having one of these VFRB's to store energy from their solar panels.
Ghyna and Ruzzia produce the most Vanadium in the world and the Ghyna reopening will include government money for construction which means Vanadium will be used for strength in rebar and beams. Right now Ghyna leads the way in VRFB technology… compliments of Unkie Sam.
https://www.reddit.com/r/Futurology/comments/wfrhnf/how_the_us_gave_away_a_breakthrough_battery/
Anyways, never bet against the USA. We'll be on top of this technology soon enough!
What do you folks think of the VRFB and LGO as a way to play this theme in electrification?
https://www.largoinc.com/Our-business/clean-energy-storage/default.aspx
https://s29.q4cdn.com/562286712/files/doc_downloads/CleanEnergy/VCHARGE_salesbrochure_final.pdf
Full Disclosure:
100 shares of LGO
105 Call Options $7.5 April/23
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