Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized VANADIUM BATTERY STORAGE REPORT Circular Business Model for Vanadium Use in Energy Storage CLIMATE-SMART MINING INITIATIVE Vanadium battery storage report 3 Contents © 2023 International Bank for Reconstruction and Development/ The World Bank 1818 H Street NW Washington, DC 20433 Telephone: 202-473-1000 www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. 1 Executive Summary 2 Analysis of the Vanadium battery market 15 23 2.1 Introduction 23 2.2 Global Energy Storage Market 23 2.3 Business Case for the Adoption of VRFBs 25 2.4 Overall Market Potential for VRFBs 26 2.4.1 Market Forecasts 27 2.5 Cost Analysis 28 2.6 Risk and Opportunity Assessment 33 2.7 Opportunity Assessment 34 2.7.1 Domestic value capture 34 2.7.2 Innovative business model for mineral financing 35 2.8 Case Study: South Africa 37 2.8.1 Energy storage market in South Africa 37 2.8.2 Competitiveness in the production of VRFBs over LiBs in South Africa 38 2.8.3 VRFB market potential in South Africa 41 3 Analysis of the Vanadium leasing model 43 3.1 Overview of Vanadium 43 3.2 Vanadium Reserves and Resources 44 3.3 Vanadium Production 45 3.4 Vanadium Consumption 48 3.5 Vanadium Production Drivers and Challenges 48 3.6 Vanadium–VRFB Value Chain Analysis 49 3.7 Vanadium Ore Extraction 50 3.8 Vanadium to Vanadium Electrolyte 51 3.9 VRFB Manufacturing and Assembly 53 3.10 VRFB Installed Capacity 53 3.11 VRFB End Use Application 55 3.12 Recycling of Vanadium 55 Any queries on rights and licenses, including subsidiary rights, should be addressed to: 3.13 Circular Business Model 56 3.14 Comparative Analysis 58 World Bank Publications The World Bank Group 1818 H Street NW Washington, DC 20433, USA 3.14.1 58 This document was written for the World Bank Group’s Climate-Smart Mining Initiative by PwC. Rights and Permissions The material in this work is subject to copyright. Because the World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Fax: 202-522-2625 Platinum 4 Vanadium battery storage report Vanadium battery storage report 5 Contents 3.15 Platinum Ore Extraction 60 6 Regulatory and legal analysis (specific to South Africa) 3.16 Beneficiation and Purification of Platinum 60 6.1 Constitution of the Republic of South Africa 104 3.17 Manufacturing of Industrial Products 61 6.2 Energy laws and policies 104 3.18 End Use Application 61 6.3 Environmental Laws and policies 104 3.19 Recycling 61 6.4 Industrial laws and policies 104 3.20 Technical and Market Challenges 62 6.5 Income Tax Act 113 3.21 Reuse of Platinum 62 6.5.1 Mining regulatory recommendations 115 3.22 Circular Business Model for Platinum 63 6.5.2 Environmental regulatory recommendations 115 3.23 Proposed Business Model for Circular Vanadium Ownership 64 6.5.3 Energy regulatory recommendations 115 3.23.1 65 6.5.4 Industrial regulatory recommendations 115 3.23.2 Scenario B: Multiple short-term Leasing 65 6.6 Using a Vanadium Leasing SPV to Benefit the Public Entity 116 3.23.3 Scenario C: Multiple short-term leasing in focused geographical region 66 6.7 Estimating the Macroeconomic and Fiscal Impact on South Africa 118 3.23.4 Financial analysis for setting up the VE recycling facility in the focused end-use geography 66 6.8 Data Validation, Data Quality, and Data Reliance 118 3.23.5 Comparative analysis of different model scenarios 67 6.9 Economic Con