Notice2021-24957
Publication of a Report on the Effect of Imports of Vanadium on the National Security: An Investigation Conducted Under Section 232 of the Trade Expansion Act of 1962, as Amended
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Published
November 18, 2021
Issuing agencies
Commerce DepartmentIndustry and Security Bureau
Abstract
The Bureau of Industry and Security (BIS) in this notice is publishing a report that summarizes the findings of an investigation conducted by the U.S. Department of Commerce (the "Department") pursuant to Section 232 of the Trade Expansion Act of 1962, as amended ("Section 232"), into the effect of imports of vanadium on the national security of the United States. This report was completed on February 22, 2021 and posted on the BIS website in July 2021. BIS has not published the appendices to the report in this notification of report findings, but they are available online at the BIS website, along with the rest of the report (see the ADDRESSES section).
Full Text
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[Federal Register Volume 86, Number 220 (Thursday, November 18, 2021)]
[Notices]
[Pages 64748-64789]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-24957]
[[Page 64747]]
Vol. 86
Thursday,
No. 220
November 18, 2021
Part V
Department of Commerce
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Bureau of Industry and Security
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Publication of a Report on the Effect of Imports of Vanadium on the
National Security: An Investigation Conducted Under Section 232 of the
Trade Expansion Act of 1962, as Amended; Notice
Federal Register / Vol. 86 , No. 220 / Thursday, November 18, 2021 /
Notices
[[Page 64748]]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
RIN 0694-XC079
Publication of a Report on the Effect of Imports of Vanadium on
the National Security: An Investigation Conducted Under Section 232 of
the Trade Expansion Act of 1962, as Amended
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Publication of a report.
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SUMMARY: The Bureau of Industry and Security (BIS) in this notice is
publishing a report that summarizes the findings of an investigation
conducted by the U.S. Department of Commerce (the ``Department'')
pursuant to Section 232 of the Trade Expansion Act of 1962, as amended
(``Section 232''), into the effect of imports of vanadium on the
national security of the United States. This report was completed on
February 22, 2021 and posted on the BIS website in July 2021. BIS has
not published the appendices to the report in this notification of
report findings, but they are available online at the BIS website,
along with the rest of the report (see the ADDRESSES section).
DATES: The report was completed on February 22, 2021. The report was
posted on the BIS website in July 2021.
ADDRESSES: The full report, including the appendices to the report, are
available online at <a href="https://www.bis.doc.gov/index.php/documents/section-232-investigations/2793-vanadium-section-232-report-public-with-appendices/file">https://www.bis.doc.gov/index.php/documents/section-232-investigations/2793-vanadium-section-232-report-public-with-appendices/file</a>.
FOR FURTHER INFORMATION CONTACT: Kevin Coyne, Industrial Studies
Division, Bureau of Industry and Security, U.S. Department of Commerce,
(202) 482-5481, <a href="/cdn-cgi/l/email-protection#e6b0878887828f938bd4d5d4a6848f95c8828985c8818990"><span class="__cf_email__" data-cfemail="adfbccc3ccc9c4d8c09f9e9fedcfc4de83c9c2ce83cac2db">[email protected]</span></a>. Unless otherwise protected by
law, any information received from the public during the course of this
investigation may be made publicly available. For more information
about the Section 232 program, including the regulations and the text
of previous investigations, please see <a href="http://www.bis.doc.gov/232">www.bis.doc.gov/232</a>.
The Effect of Imports of Vanadium on the National Security
An Investigation Conducted Under Section 232 of the Trade Expansion Act
of 1962, as Amended
U.S. Department of Commerce
Bureau of Industry and Security
Office of Technology Evaluation
February 22, 2021
Table of Contents
I. Executive Summary
A. Findings
1. Vanadium Is Essential to U.S. National Security
2. Imports of Vanadium Have Mixed Effects on the Economic
Welfare of the U.S. Vanadium Industry
3. Displacement of Domestically-Produced Vanadium by Imports
Affects Our Internal Economy, But Is Mitigated by Ongoing Actions
4. Increased Global Capacity and Production of Vanadium Will
Further Impact the Long-Term Viability of U.S. Vanadium Production
5. Unilaterally Increasing Domestic Prices of Vanadium Would
Harm Critical U.S. Industries
B. Conclusion
C. Recommendations
II. Legal Framework
A. Section 232 Requirements
B. Discussion
III. Investigative Process
A. Initiation of Investigation
B. Public Comments
C. Information Gathering and Data Collection Activities
D. Interagency Consultation
IV. Product Scope of Investigation
V. Background on U.S. Vanadium Industry
A. Vanadium Production
B. Vanadium Uses
VI. Global Vanadium Industry Conditions
A. Overview
B. Prior Trade Investigations
C. U.S. Duties on Vanadium Imports
VII. Findings
A. Vanadium Is Essential to U.S. National Security
1. Vanadium Is Considered a Critical Mineral
2. Vanadium Is Required for National Defense Systems
3. Vanadium Is Required for Critical Infrastructure
4. Vanadium Has Significant Effects on Other Critical Industries
B. Imports of Vanadium Have Mixed Effects on the Economic
Welfare of the U.S. Vanadium Industry
1. The U.S. Is Presently Reliant on Imports of Vanadium
2. U.S. Reliance on Imports of Vanadium Is Not Increasing
3. Prices
4. Employment
5. Financial Outlook
6. Exploration
7. Capital Expenditures
8. Environmental Factors
C. Displacement of Domestically-Produced Vanadium by Imports
Affects Our Internal Economy, but Is Mitigated by Ongoing Actions
1. U.S. Production of Vanadium Is Well Below Domestic Demand
2. Domestic Production Is Highly Concentrated and Limits
Capacity Available for a National Emergency
3. Domestic Vanadium Production Currently Requires Significant
Imports of Vanadium Feedstock, Limiting Capacity Available for a
National Emergency
4. Trade Actions Have Been Successful in Mitigating Artificially
Low-Priced Imports of Vanadium
5. Critical Minerals Agreements Will Help Ensure Reliable
Supplies of Vanadium
D. Increased Global Capacity and Production of Vanadium Will
Further Impact the Long-Term Viability of U.S. Vanadium Production
1. China Possesses an Outsized Role in the Global Price of
Vanadium
2. Expansion of Low-Cost Production in Several Countries Will
Place Downward Pressure on Global Vanadium Prices
3. Downward Price Pressure May Be Mitigated by Increased Demand
for Steel, Titanium, and Energy Storage
4. Significant Price Swings Impair the Ability of Domestic
Producers To Plan and Carry Out Capital Expenditures
E. Unilaterally Increasing Domestic Prices of Vanadium Would
Harm Critical U.S. Industries
1. Domestic Vanadium Prices Significantly Exceeding World Prices
Would Disadvantage the U.S. Steel Industry
2. Domestic Vanadium Prices Significantly Exceeding World Prices
Would Harm the U.S. Titanium Industry, to the Benefit of Russian and
Chinese Titanium Producers
VIII. Conclusion
A. Determination
B. Recommendations
APPENDICES
Appendix A: Section 232 Investigation Notification Letter to
Secretary of Defense Mark Esper, May 21, 2020
Appendix B: Federal Register Notice--Notice of Requests for Public
Comments on Section 232 National Security Investigation of Imports
of Vanadium, June 3, 2020
Appendix C: Federal Register Notice--Reopening of Comment Period for
Section 232 National Security Investigation of Imports of Vanadium,
September 25, 2020
Appendix D: Summary of Public Comments
Appendix E: Survey for Data Collection
Prepared by Bureau of Industry and Security
<a href="http://www.bis.doc.gov">http://www.bis.doc.gov</a>
I. Executive Summary
This report summarizes the findings of an investigation conducted
by the U.S. Department of Commerce (the ``Department'') pursuant to
Section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C.
1862 (``Section 232'')), into the effect of imports of vanadium \1\ on
the national security of the United States.
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\1\ See Figure 1 in Section IV, ``Product Scope of the
Investigation,'' for the vanadium products addressed by this report.
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Vanadium is used primarily as a strengthening agent in steel
products, particularly for products in the construction industry and in
tool steel. A smaller but essential use is in titanium aerospace
alloys; military and
[[Page 64749]]
commercial aircraft are dependent on vanadium-containing titanium
products. Vanadium also has significant chemical uses, including as a
catalyst in the production of sulfuric acid--itself an important
industrial material used in a wide range of production--and in large
scale energy storage.
There are three general methods of vanadium production: Primary
(mining), co-production (from mined ore in concert with steelmaking),
and secondary production or recycling (from residues and waste
materials). Production generally results in vanadium pentoxide, which
can be used in titanium and non-metallurgical uses or further
converted, generally to ferrovanadium for incorporation into steel.
There is currently one primary producer of vanadium in the United
States (uranium miner Energy Fuels Resources). There are two active
secondary producers (the companies that submitted the Section 232
application, AMG Vanadium and U.S. Vanadium), plus a third secondary
producer currently modernizing an idle facility (Gladieux Metals
Recycling). The primary producer only produced vanadium during one of
the last five years and supplied less than 4% of U.S. demand.
Globally, primary and co-production of vanadium is concentrated in
four countries: China, Russia, South Africa, and Brazil, with China
accounting for over half of global production. Since 1995, the United
States has found that imports of ferrovanadium from all major primary
producers except Brazil have been sold at less than fair value,
resulting in antidumping duties. These duties remain in effect for
China and South Africa but have since been revoked for Russia.
Although the United States is reliant on imports of vanadium
pentoxide, ferrovanadium, or vanadium-bearing waste products to meet
domestic demand, this import reliance will be mitigated by a major
expansion being carried out by AMG Vanadium doubling their
ferrovanadium production capacity, and the soon-expected completion of
Gladieux's renovation, which will reintroduce significant domestic
vanadium pentoxide production. In addition, two mining projects are in
the exploratory or permitting phase, potentially adding domestic
production capacity as soon as 2023.
The biggest challenge the industry faces is low and volatile
vanadium prices. Prices are currently below the levels required for
cost effective primary production in the United States, and make it
difficult for secondary producers to source feedstock and operate
profitably. Adding to producers' woes are the major demand declines due
to COVID-19, with demand for vanadium in titanium products hit
especially hard as a result of decreased consumption by the aerospace
industry.
Given vanadium's almost-exclusive use in concert with steel and
titanium, and, as steel and titanium are both considered critical to
national security--with their domestic production threatened by
imports, as reported in recent Section 232 reports--the Department
finds that unilaterally imposing import tariffs or quotas in order to
raise the domestic price of vanadium would largely impact domestic
steel and titanium industries and would therefore have significant
negative effects on the economic and national security of the United
States. Cost increases for only domestic steel and titanium producers
would put these critical industries, already threatened by low-cost
imports, at a further disadvantage relative to foreign producers.
In conducting this investigation, the Secretary of Commerce (the
``Secretary'') noted the Department's prior investigations under
Section 232. This report incorporates the statutory analysis from the
Department's 2018 reports on the imports of steel and aluminum \2\ with
respect to applying the terms ``national defense'' and ``national
security'' in a manner that is consistent with the statute and
legislative intent.\3\
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\2\ U.S. Department of Commerce. Bureau of Industry and
Security. The Effect of Imports of Steel on the National Security
(Washington, DC: 2018) (``Steel Report'') and U.S. Department of
Commerce. Bureau of Industry and Security. The Effect of Imports of
Aluminum on the National Security (Washington, DC: 2018) (``Aluminum
Report''). <a href="https://www.bis.doc.gov/index.php/documents/steel/2224-the-effect-of-imports-of-steel-on-the-national-security-with-redactions-20180111/file">https://www.bis.doc.gov/index.php/documents/steel/2224-the-effect-of-imports-of-steel-on-the-national-security-with-redactions-20180111/file</a> <a href="https://www.bis.doc.gov/index.php/documents/aluminum/2223-the-effect-of-imports-of-aluminum-on-the-national-security-with-redactions-20180117/file">https://www.bis.doc.gov/index.php/documents/aluminum/2223-the-effect-of-imports-of-aluminum-on-the-national-security-with-redactions-20180117/file</a>.
\3\ Steel Report at 13-14; Aluminum Report at 12-13.
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As required by the statute, the Secretary considered all factors
set forth in Section 232(d). In particular, the Secretary examined the
effect of imports on national security requirements, specifically:
i. Domestic production needed for projected national defense
requirements;
ii. the capacity of domestic industries to meet such requirements;
iii. existing and anticipated availabilities of the human
resources, products, raw materials, and other supplies and services
essential to the national defense;
iv. the requirements of growth of such industries and such supplies
and services including the investment, exploration, and development
necessary to assure such growth; and
v. the importation of goods in terms of their quantities,
availabilities, character, and use as those affect such industries; and
the capacity of the United States to meet national security
requirements.
In preparing this report, the Secretary also recognized the close
relation of the economic welfare of the United States to its national
security. Factors that can compromise the nation's economic welfare
include, but are not limited to, the impact of ``foreign competition on
the economic welfare of individual domestic industries; and any
substantial unemployment, decrease in revenues of government, loss of
skills, or any other serious effects resulting from the displacement of
any domestic products by excessive imports.'' See 19 U.S.C. 1862(d). In
particular, this report assesses whether vanadium is being imported
``in such quantities'' and ``under such circumstances'' as to
``threaten to impair the national security.'' \4\
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\4\ 19 U.S.C. 1862(b)(3)(A).
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A. Findings
In conducting the investigation, the Secretary found:
1. Vanadium Is Essential to U.S. National Security
(a) Vanadium is a critical mineral. The Department of Interior
included vanadium on the 2018 List of Critical Minerals required by
Executive Order 13817, issued December 20, 2017.\5\ Pursuant to the
Executive Order, the list established vanadium as essential to the
national security of the United States and found that the absence of a
vanadium supply would have significant consequences for the U.S.
economy and national security.
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\5\ <a href="https://www.usgs.gov/news/interior-releases-2018-s-final-list-35-minerals-deemed-critical-us-national-security-and">https://www.usgs.gov/news/interior-releases-2018-s-final-list-35-minerals-deemed-critical-us-national-security-and</a>.
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(b) Vanadium is required for national defense systems because of
its use in steel and titanium alloys. Vanadium is irreplaceable in key
titanium aerospace applications, and many military airframes contain
significant amounts of vanadium.
(c) Vanadium is required for critical infrastructure. A key feature
in the high-strength, low-alloy (HSLA) steel products used in the
construction industry, as well as in tool steel and
[[Page 64750]]
high-speed steels, vanadium steel alloys are used throughout U.S.
critical infrastructure. In addition, nearly all vanadium-bearing
titanium products are used in the critical transportation or defense
sectors.
(d) The vanadium industry has significant effects on other
industries critical to U.S. national security. As stated above,
vanadium has essential uses in steel and titanium products, and
vanadium resources in the United States are often co-located with
uranium resources. The Department has recently found that imports in
all three of these industries threaten to impair U.S. national
security.
2. Imports of Vanadium Have Mixed Effects on the Economic Welfare of
the U.S. Vanadium Industry
(a) The United States is presently reliant on imports of vanadium.
The only primary vanadium producer in the United States has only
produced during one of the last five years, due to low vanadium prices.
Domestic secondary producers of vanadium import significant quantities
of their feedstock, [TEXT REDACTED].
(b) U.S. reliance on imports of vanadium is not increasing.
Although the country is reliant on imports of vanadium to meet civilian
demand, major U.S. producers of ferrovanadium and vanadium pentoxide
are in the process of expanding or restarting operations. Given the
successful completion of these initiatives, U.S. capacity for
ferrovanadium production from vanadium-bearing waste is projected to
more than double in 2021, and U.S. capacity for vanadium pentoxide
production from vanadium-bearing waste is projected to increase
significantly with the re-opening of a secondary production facility.
In addition, several domestic mining companies have idle production
capacity or are exploring the development of vanadium mines. If
domestic vanadium prices rise, or in the event of a national emergency,
these companies may increase production and capacity, including through
new mines.
(c) Given continuing low domestic prices, the U.S. vanadium
industry may face significant financial challenges. [TEXT REDACTED]
However, it is difficult to accurately characterize the financial
health of the industry due to recent facility turnover, significant
ongoing investments, and recent lack of operational activities.
(d) Significant resources exist in the United States for primary
production. At least three companies have mines that have produced
vanadium in the past, and two additional projects are under
development.
(e) Secondary production of vanadium is environmentally beneficial.
The vanadium-bearing waste products used in secondary production are
classified by the Environmental Protection Agency (EPA) as hazardous
waste. However, secondary production reclaims critical minerals and can
divert significant amounts of material from landfills, instead using
them in products critical to national defense.
3. Displacement of Domestically-Produced Vanadium by Imports Affects
Our Internal Economy, But Is Mitigated by Ongoing Actions
(a) U.S. production of vanadium is well below domestic demand.
Primary and secondary producers produced an annual average of 3.4
million kilograms of vanadium content from 2016 to 2019, while domestic
imports of key vanadium products approached 8 million kilograms.
(b) Domestic production is highly concentrated and limits the
capacity available for a national emergency. Just three domestic
companies carried out vanadium production in 2019. Additional capacity
in the future is not guaranteed, based on low vanadium prices.
(c) Domestic vanadium production currently requires significant
imports of vanadium feedstock, limiting vanadium production capacity
available for a national emergency. Only one vanadium producer in
recent years has used entirely U.S. origin material, producing the
equivalent of 1.4% of total domestic demand since 2016. Secondary
producers all use significant levels of foreign feedstock; the United
States is unable to satisfy all domestic demand with U.S. sourced
material.
(d) Recent trade actions have successfully mitigated artificially
low-priced imports of ferrovanadium. Of the four countries with
significant primary production of vanadium, three have been subject to
the imposition of antidumping duties on ferrovanadium based on
petitions from domestic ferrovanadium producers. In all cases, imports
of ferrovanadium from the subject countries fell to close to zero
following the imposition of the duties.
(e) Critical minerals agreements with other countries will help
ensure reliable supplies of vanadium. The United States government
(USG) released in June 2019 A Federal Strategy to Ensure Secure and
Reliable Supplies of Critical Minerals, which includes a goal of
enhanced international trade and cooperation related to critical
minerals.\6\ The United States has subsequently entered into official
critical minerals collaborations with Canada and Australia, both of
which have significant vanadium resources.
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\6\ <a href="https://www.commerce.gov/data-and-reports/reports/2019/06/federal-strategy-ensure-secure-and-reliable-supplies-critical-minerals">https://www.commerce.gov/data-and-reports/reports/2019/06/federal-strategy-ensure-secure-and-reliable-supplies-critical-minerals</a>.
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4. Increased Global Capacity and Production of Vanadium Will Further
Impact the Long-Term Viability of U.S. Vanadium Production
(a) China, which accounts for an estimated 50 to 60% of global
vanadium production and consumption, possesses an outsized role in
determining the global price of vanadium. This concentration of supply
and demand means that policy changes in China have significant effects
on the global vanadium market, including major price changes in the
near past.
(b) Expansion of low-cost production in countries other than China
will place downward pressure on global vanadium prices. Mines in
development or exploration in Kazakhstan, Canada, and Australia have
the ability to nearly double current global mine production, should
they all enter production.
(c) Downward price pressure may be mitigated by increased demand
for steel, titanium, and energy storage. Although currently
significantly affected by COVID-19, higher demand in the steel and
titanium industries would put upward pressure on vanadium prices.
Additionally, annual growth projections for the use of vanadium-based
batteries range from 13 to 42% through 2027, which could produce
significant additional demand.
(d) Significant price swings impair the ability of domestic
producers to plan and carry out capital expenditures. With vanadium
projects taking years to complete and major price swings a common
occurrence, companies may be challenged to find financing throughout
the course of the development of new vanadium capabilities, or may find
their projects not viable once completed.
5. Unilaterally Increasing Domestic Prices of Vanadium Would Harm
Critical U.S. Industries
(a) Domestic vanadium prices significantly exceeding world prices
would disadvantage the U.S. steel industry. The Department's 2018
Section 232 investigation on steel imports found that the steel
industry was threatened by imports and in need of assistance to remain
viable. As the predominant user of vanadium, the domestic steel
industry would face new
[[Page 64751]]
threats from foreign steel producers if its input costs were
significantly higher than those in other countries.
(b) Domestic vanadium prices significantly exceeding world prices
would also harm the U.S. titanium industry, to the benefit of Russian
and Chinese producers. The titanium industry is dependent on vanadium
because vanadium accounts for between 12 and 14% of the cost of a
standard titanium alloy. The U.S. titanium industry is facing
significant financial challenges from declines in demand (related to
COVID-19), and may not be able to bear additional costs that
international competitors do not.
B. Conclusion
Based on these findings, the Secretary concludes that the present
quantities and circumstances of vanadium imports do not threaten to
impair the national security as defined in Section 232. Although
vanadium is critical to national security and the United States is
currently dependent on imported sources of vanadium, [TEXT REDACTED]
several significant factors, including the health of the U.S. industry,
availability of idle domestic resources, existing USG actions, and the
importance of vanadium to competitive steel and titanium industries,
indicate that imports of vanadium do not currently threaten to impair
national security.
The United States is currently reliant on imports to satisfy demand
for vanadium products and is not producing significant amounts of
vanadium from U.S.-origin material, but these circumstances are not
expected to deteriorate. Two domestic secondary producers are in the
process of expanding and/or upgrading their facilities, which will add
significantly to the U.S. ability to produce ferrovanadium and vanadium
pentoxide from vanadium-bearing waste materials.
Furthermore, in addition to the one existing domestic primary
producer, several other companies are in the process of exploring
vanadium mining ventures and will be in a position to produce within
several years if vanadium prices rise sufficiently. Even if primary
production is not feasible at current vanadium prices, the availability
of these resources allows for production potential in the event of
national emergency. An increase in the production of domestic primary
vanadium, expansion of secondary production, and the addition of
domestic feedstock for secondary production should mitigate the current
levels of reliance on imports.
However, the projected rise in capacity does not necessarily mean
that the domestic vanadium industry is healthy. Vanadium prices have a
long history of volatility, with prices going through cycles of surging
and plunging. The main users of vanadium--the steel and titanium
industries--experienced major declines in demand in 2020 related to
COVID-19, with the titanium industry particularly challenged by a large
decrease in aerospace demand. If vanadium prices fail to rise, some of
the capacity under exploration may not turn into production, and one or
more secondary producers may face financial difficulty or challenges in
sourcing vanadium-bearing feedstock.
Further, the lack of a finding of a threat to national security
does not indicate that a healthy domestic vanadium industry is not of
vital importance to the United States. While the Secretary does not
believe that imports of vanadium need to be adjusted at this time,
there are several steps that can and should be taken to support the
domestic vanadium industry and related sectors to ensure safe and
reliable sources of vanadium in the event of a national emergency,
thereby enhancing and protecting U.S. national security.
C. Recommendations
The Department has identified several actions that would help to
ensure reliable domestic sources of vanadium and lessen the potential
for imports to threaten national security. These actions are not
intended to be exhaustive or exclusive; the Secretary recommends
pursuing all proposed actions.
Recommendation 1--Expansion of the National Defense Stockpile To
Include High Purity Vanadium Pentoxide
The USG should support domestic vanadium production and ensure a
source of vanadium in the event of national emergency by re-adding
vanadium pentoxide to the National Defense Stockpile. Vanadium
pentoxide was part of the stockpile until 1997; the stockpile held
6,200 tons of contained vanadium \7\ in 1965 and had a goal of 7,000
tons though it held just 651 tons prior to the decision to reduce the
target level to zero in 1993, following the end of the cold war.\8\
Using high purity vanadium pentoxide--suitable for use in titanium
alloys or chemical uses as well as conversion into ferrovanadium for
use in the steel industry--would ensure vanadium held in the stockpile
could be used for any necessary product in the event of national
security.
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\7\ Vanadium is generally reported in terms of ``contained
vanadium'', or the weight of only the vanadium portion of a vanadium
compound. Vanadium represents 56% of the weight of vanadium
pentoxide.
\8\ USGS Vanadium Mineral Commodity Summaries. <a href="https://www.usgs.gov/centers/nmic/vanadium-statistics-and-information">https://www.usgs.gov/centers/nmic/vanadium-statistics-and-information</a>.
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National Defense Stockpile goals were initially set to ensure
sufficient product to support one year's demand for the entire country
but were later narrowed to focus on defense-specific needs, primarily
due to funding constraints. Given the importance of vanadium and other
critical minerals to the economy, the economic and national security of
the United States would be better served by pursuing stockpile goals
that support national security beyond defense-specific requirements.
The re-addition of vanadium to the stockpile would require
authorization and funding from Congress.
The Department recommends that the size of the proposed vanadium
addition to the stockpile should be based on three benchmarks: Defense
system requirements, broader national security requirements, and total
domestic demand. As discussed above, defense system requirements may
conservatively amount to 273 metric tons of vanadium content per year;
this inventory level would be worth approximately $10.5 million based
on average vanadium pentoxide prices since 2016.\9\ Critical
infrastructure requirements add an estimated 4,527 tons per year,
resulting in a minimum stockpile goal based on total national security
requirements of 4,800 tons of contained vanadium, at a cost of $184.8
million. Finally, total domestic apparent consumption (including
defense and critical infrastructure needs) averaged 8,590 tons of
contained vanadium annually from 2016 to 2019. Establishing a stockpile
goal at this level, sufficient to meet all domestic demand, would be
valued at $330.6 million.
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\9\ Average price per pound vanadium pentoxide from 2016-2019 of
$9.80, based on data from USGS: <a href="https://pubs.usgs.gov/periodicals/mcs2020/mcs2020-vanadium.pdf">https://pubs.usgs.gov/periodicals/mcs2020/mcs2020-vanadium.pdf</a>.
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Beyond the minimum stockpile level, the Secretary further
recommends that the stockpile of vanadium pentoxide be authorized to
expand in size during periods of unusually low prices (with purchases
made from domestic producers), while remaining unchanged or shrinking
during periods of higher-than-average prices. This policy would help
mitigate the large historic price swings that have caused significant
financial distress and impeded capital investment in the domestic
vanadium industry while helping to regulate domestic prices.
[[Page 64752]]
Implementing this policy would require legislative changes to the
Strategic and Critical Materials Stockpiling Act (50 U.S.C. 98, et
seq.) (Stockpiling Act). While the mitigation of critical mineral price
swings and the purchase of critical minerals from domestic producers at
a premium when prices are unusually low serves the interest of national
defense, the Stockpiling Act requires that the stockpile ``not be used
for economic or budgetary purposes,'' which may present a challenge in
allowing the stockpile to exceed minimum defense needs based on prices.
Allowing the stockpile to be used for economic purposes if such actions
support the health and competitiveness of affected industries would
help enhance U.S. national security.
As an additional potential benefit, once the vanadium holdings in
the National Defense Stockpile are established, they could--with the
authorization of Congress and in cooperation with the Department of
Energy--be used without cost to support another sector: Large scale
energy storage. As noted above, a potential new use for vanadium is in
vanadium redox flow batteries, which have the advantage of using
vanadium in both parts of the electrolyte, eliminating the risk of
cross-contamination and allowing for the vanadium to be re-claimed from
the batteries at a low cost with minimal yield loss.\10\
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\10\ Vanitec estimates cost of conversion from leachate to
vanadium pentoxide at $1 per pound vanadium pentoxide with a 95%
yield. <a href="http://www.vanitec.org/vanadium/ESC-Meetings">http://www.vanitec.org/vanadium/ESC-Meetings</a>.
---------------------------------------------------------------------------
With vanadium accounting for approximately 30% of the cost of a
vanadium redox flow battery and initial battery cost reductions needed
to enable larger scale use, the USG could reduce the costs of the
stockpile and support the energy storage sector by leasing a portion of
the stockpile to be managed by vanadium redox flow battery companies,
on condition of the leased vanadium being immediately reclaimable in
the event of a national emergency. Given restrictions on transfers to
and from the stockpile, this use of material in the stockpile would
require either a legislative change to the Stockpiling Act or the
designation of the leased material as still being part of the stockpile
despite being used for energy storage.
Recommendation 2--Recycling Promotion
The Federal Strategy to Ensure Secure and Reliable Supplies of
Critical Minerals (Federal Strategy) identifies an available, on-demand
supply of critical minerals as ``essential to the economic prosperity
and national defense of the United States.'' \11\ The Federal Strategy
recommends the support of recycling and reprocessing of critical
minerals, including vanadium. Given that nearly all vanadium production
in the United States is performed through recycling, the USG should
support the vanadium industry through USG-wide actions to promote the
recycling of materials containing critical minerals.
---------------------------------------------------------------------------
\11\ <a href="https://www.commerce.gov/sites/default/files/2020-01/Critical_Minerals_Strategy_Final.pdf">https://www.commerce.gov/sites/default/files/2020-01/Critical_Minerals_Strategy_Final.pdf</a>.
---------------------------------------------------------------------------
A 2002 EPA analysis, carried out in support of the May 8, 2002
final rule on the identification and listing of spent catalysts as
hazardous waste, showed that in 1999, just 55% of spent catalyst was
recycled, in large part because the cost of recycling was estimated to
be three times that of landfill disposal.\12\ Bringing the recycling of
vanadium-bearing wastes generated in the United States to or near 100%
has the potential to greatly expand the availability of vanadium
products of domestic origin. Such recycling will occur naturally with
higher vanadium prices, as refiners typically receive a metals credit
from vanadium producers based on vanadium sale price, but can also be
encouraged through the consideration of recycling tax deductions or
credits as well as EPA review of their regulatory authority governing
disposal of hazardous waste.
---------------------------------------------------------------------------
\12\ 67 FR 30811 and <a href="https://archive.epa.gov/epawaste/hazard/web/pdf/backdoc.pdf">https://archive.epa.gov/epawaste/hazard/web/pdf/backdoc.pdf</a>.
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For example, additional information submitted by industry to the
Department reported that the 2020 International Maritime Organization's
(IMO) regulation requiring the reduction of allowable levels of sulfur
in maritime fuels from 3.5% to 0.5% has increased refinery catalyst
use, which is expected to result in increased availability of spent
catalyst used to produce vanadium.\13\ Similar regulations in the
United States would support both the EPA mission to protect human
health and the environment and domestic production of critical
minerals.
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\13\ <a href="https://ig9we1q348z124x3t10meupc-wpengine.netdna-ssl.com/wp-content/uploads/AMG-Annual-Report-Web-FINAL.pdf">https://ig9we1q348z124x3t10meupc-wpengine.netdna-ssl.com/wp-content/uploads/AMG-Annual-Report-Web-FINAL.pdf</a>.
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Recommendation 3--Continue USG Actions To Support Critical Minerals
Many of the challenges domestic vanadium producers face are not
unique to vanadium; with this investigation the Department has
completed Section 232 investigations on four of the 35 critical
minerals. While the specific challenges of each critical mineral are
distinct, many industrial trends are similar and broad solutions may be
more effective than individual targeting. There are several ongoing and
proposed U.S. government actions that support the domestic supply of
critical minerals. Continuing to pursue these actions will provide
necessary support to the domestic vanadium industry as well as to the
broader critical minerals sector.
Among the key actions that will enable strong domestic critical
minerals industries are Executive Order 13817 and the resulting Federal
Strategy, Executive Order 13953 (Addressing the Threat to the Domestic
Supply Chain From Reliance on Critical Minerals From Foreign
Adversaries and Supporting the Domestic Mining and Processing
Industries), proposals from the USG Nuclear Fuel Working Group, work
being carried out by the Titanium Sponge Working Group, and legislative
action to support domestic production of critical minerals. Since the
list of suitable substitutions for vanadium in steel and certain
chemical processes includes other minerals on the critical minerals
list (including manganese, niobium, titanium, tungsten, and platinum),
actions to support production of critical minerals as a whole would
also help to address domestic vanadium supply challenges.
The Federal Strategy, developed pursuant to Executive Order 13817,
was announced in June 2019, with six calls to action containing 24
goals and 61 recommended actions that federal agencies should pursue to
improve the availability of critical minerals and their downstream
supply chains in the United States to help reduce the country's
vulnerability to supply chain disruptions. Many of the identified goals
of the Federal Strategy are consistent with the findings and
recommendations of this investigation, including:
(a) Support for downstream materials production capacity;
(b) enhancing the National Defense Stockpile's ability to meet
military as well as civilian requirements;
(c) securing access to critical minerals through trade and
investment with allies;
(d) identifying methods to encourage secondary use of critical
minerals; and
(e) streamlining permit processes for critical mineral projects.
The President issued Executive Order 13953, ``Addressing the Threat
to the Domestic Supply Chain From Reliance on Critical Minerals From
Foreign Adversaries and Supporting the Domestic Mining and Processing
Industries,'' (E.O. 13953), in September 2020. The Order identifies the
need to ensure a consistent supply of critical
[[Page 64753]]
minerals and declares a national emergency to reduce the threat posed
by the country's undue reliance on critical minerals from foreign
adversaries. Many of the actions taken pursuant to E.O. 13953 will
support the domestic vanadium industry, particularly vanadium mining.
In addition to Executive actions, there have recently been several
legislative proposals that would provide support for vanadium and other
critical minerals. Examples include H.R. 8143 (also known as the
Reclaiming American Rare Earths (RARE) Act) and S. 3694 (the Onshoring
Rare Earths (ORE) Act of 2020). Both bills as written restrict the
definition of critical minerals to a subset of those identified by the
Department of Interior in response to E.O. 13817, and need to be
expanded to include vanadium and other critical minerals, but otherwise
have features of significant value to the domestic vanadium industry.
In addition to allowing a tax deduction for investments in property
used for mining, reclaiming, or recycling critical materials, these
bills would support the function of critical minerals in the broader
economy by providing grants or allowing tax deductions for critical
minerals extracted in the United States. In addition to expanding the
bills to include vanadium (as noted above), in order to provide the
most value to the country, the Department recommends that any
legislation should ensure that extraction incentives include recycling
and reclamation.
Finally, the Department's Section 232 investigations into imports
of Uranium and Titanium sponge resulted in the creation of USG working
groups tasked with developing recommendations additional to those made
in each report. Given the significant intersections between the
vanadium industry and the uranium and titanium industries, the
implementation of the working groups' recommendations will support the
vanadium industry as well.
II. Legal Framework
A. Section 232 Requirements
Section 232 of the Trade Expansion Act of 1962, as amended,
provides the Secretary with the authority to conduct investigations to
determine the effect on the national security of the United States of
imports of any article. It authorizes the Secretary to conduct an
investigation if requested by the head of any department or agency,
upon application of an interested party, or upon his own motion. See 19
U.S.C. 1862(b)(1)(A).
Section 232 directs the Secretary to submit to the President a
report with recommendations for ``action or inaction under this
section'' and requires the Secretary to advise the President if any
article ``is being imported into the United States in such quantities
or under such circumstances as to threaten to impair the national
security.'' See 19 U.S.C. 1862(b)(3)(A).
Section 232(d) directs the Secretary and the President to, in light
of the requirements of national security and without excluding other
relevant factors, give consideration to the domestic production needed
for projected national defense requirements and the capacity of the
United States to meet national security requirements. See 19 U.S.C.
1862(d).
Section 232(d) also directs the Secretary and the President to
``recognize the close relation of the economic welfare of the Nation to
our national security, and . . . take into consideration the impact of
foreign competition on the economic welfare of individual domestic
industries'' by examining whether any substantial unemployment,
decrease in revenues of government, loss of skills or investment, or
other serious effects resulting from the displacement of any domestic
products by excessive imports, or other factors, results in a
``weakening of our internal economy'' that may impair the national
security.\14\ See 19 U.S.C. 1862(d).
---------------------------------------------------------------------------
\14\ An investigation under Section 232 looks at excessive
imports for their threat to the national security, rather than
looking at unfair trade practices as in an antidumping
investigation.
---------------------------------------------------------------------------
Once an investigation has been initiated, Section 232 mandates that
the Secretary provide notice to the Secretary of Defense that such an
investigation has been initiated. Section 232 also requires the
Secretary to do the following:
(1) ``Consult with the Secretary of Defense regarding the
methodological and policy questions raised in [the] investigation;''
(2) ``Seek information and advice from, and consult with,
appropriate officers of the United States;'' and
(3) ``If it is appropriate and after reasonable notice, hold
public hearings or otherwise afford interested parties an
opportunity to present information and advice relevant to such
investigation.'' \15\ See 19 U.S.C. 1862(b)(2)(A)(i)-(iii).
---------------------------------------------------------------------------
\15\ Department regulations (i) set forth additional authority
and specific procedures for such input from interested parties, see
15 CFR 705.7 and 705.8, and (ii) provide that the Secretary may vary
or dispense with those procedures ``in emergency situations, or when
in the judgment of the Department, national security interests
require it.'' Id., 705.9.
As detailed in the report, all of the requirements set forth above have
been satisfied.
In conducting the investigation, Section 232 permits the Secretary
to request that the Secretary of Defense provide an assessment of the
defense requirements of the article that is the subject of the
investigation. See 19 U.S.C. 1862(b)(2)(B).
Upon completion of a Section 232 investigation, the Secretary is
required to submit a report to the President no later than 270 days
after the date on which the investigation was initiated. See 19 U.S.C.
1862(b)(3)(A). The report must:
(1) Set forth ``the findings of such investigation with respect
to the effect of the importation of such article in such quantities
or under such circumstances upon the national security;''
(2) Set forth, ``based on such findings, the recommendations of
the Secretary for action or inaction under this section;'' and
(3) ``If the Secretary finds that such article is being imported
into the United States in such quantities or under such
circumstances as to threaten to impair the national security . . .
so advise the President.'' See 19 U.S.C. 1862(b)(3)(A).
All unclassified and non-proprietary portions of the report
submitted by the Secretary to the President must be published.
Within 90 days after receiving a report in which the Secretary
finds that an article is being imported into the United States in such
quantities or under such circumstances as to threaten to impair the
national security, the President shall:
(1) ``Determine whether the President concurs with the finding
of the Secretary''; and
(2) ``If the President concurs, determine the nature and
duration of the action that, in the judgment of the President, must
be taken to adjust the imports of the article and its derivatives so
that such imports will not threaten to impair the national
security'' (see 19 U.S.C. 1862(c)(1)(A)).
B. Discussion
While Section 232 does not specifically define ``national
security,'' both Section 232, and the implementing regulations at 15
CFR part 705, contain non-exclusive lists of factors that the Secretary
must consider in evaluating the effect of imports on the national
security. Congress in Section 232 explicitly determined that ``national
security'' includes, but is not limited to, ``national defense''
requirements. See 19 U.S.C. 1862(d)).
In a 2001 report, the Department determined that ``national
defense'' includes both the defense of the United States directly, and
the ``ability to
[[Page 64754]]
project military capabilities globally.'' \16\ The Department also
concluded in 2001 that, ``in addition to the satisfaction of national
defense requirements, the term ``national security'' can be interpreted
more broadly to include the general security and welfare of certain
industries, beyond those necessary to satisfy national defense
requirements, which are critical to the minimum operations of the
economy and government.'' The Department called these ``critical
industries.'' \17\ While this report uses these reasonable
interpretations of ``national defense'' and ``national security,'' it
uses the more recent 16 critical infrastructure sectors identified in
Presidential Policy Directive 21 \18\ instead of the 28 industry
sectors identified in the 2001 Report.\19\
---------------------------------------------------------------------------
\16\ Department of Commerce, Bureau of Export Administration;
The Effects of Imports of Iron Ore and Semi-Finished Steel on the
National Security; Oct. 2001 (``2001 Iron and Steel Report'') at 5.
\17\ Id.
\18\ Presidential Policy Directive 21; Critical Infrastructure
Security and Resilience; February 12, 2013 (``PPD-21'').
\19\ See Op. Cit. at 16.
---------------------------------------------------------------------------
Section 232 directs the Secretary to determine whether imports of
any article are being made ``in such quantities'' or ``under such
circumstances'' that those imports ``threaten to impair the national
security.'' See 19 U.S.C. 1862(b)(3)(A). The statutory construction
makes clear that either the quantities or the circumstances, standing
alone, may be sufficient to support an affirmative finding. The two may
also be considered together, particularly when the circumstances act to
prolong or magnify the impact of the quantities being imported.
The statute does not define a threshold for when ``such
quantities'' of imports are sufficient to threaten to impair the
national security, nor does it define the ``circumstances'' that might
qualify.
Similarly, the statute does not require a finding that the
quantities or circumstances are impairing the national security.
Instead, the threshold question under Section 232 is whether the
quantities or circumstances ``threaten to impair the national
security.'' See 19 U.S.C. 1862(b)(3)(A). This makes evident that
Congress expected an affirmative finding under Section 232 before an
actual impairment of the national security.\20\
---------------------------------------------------------------------------
\20\ The 2001 Iron and Steel Report used the phrase
``fundamentally threaten to impair'' when discussing how imports may
threaten to impair national security. See 2001 Iron and Steel Report
at 7 and 37. Because the term ``fundamentally'' is not included in
the statutory text and could be perceived as establishing a higher
threshold, the Secretary expressly does not use the qualifier in
this report. The statutory threshold in Section 232(b)(3)(A) is
unambiguously ``threaten to impair'' and the Secretary adopts that
threshold without qualification. 19 U.S.C. 1862(b)(3)(A).
---------------------------------------------------------------------------
Section 232(d) contains a list of factors for the Secretary to
consider in determining if imports ``threaten to impair the national
security'' \21\ of the United States, and this list is mirrored in the
implementing regulations. See 19 U.S.C. 1862(d) and 15 CFR 705.4.
Congress was careful to note twice in Section 232(d) that the list
provided, while mandatory, is not exclusive.\22\ Congress' illustrative
list is focused on the ability of the United States to maintain the
domestic capacity to provide the articles in question as needed to
maintain the national security of the United States.\23\ Congress broke
the list of factors into two equal parts using two separate sentences.
The first sentence focuses directly on ``national defense''
requirements, thus making clear that ``national defense'' is a subset
of the broader term ``national security.'' The second sentence focuses
on the broader economy and expressly directs that the Secretary and the
President ``shall recognize the close relation of the economic welfare
of the Nation to our national security.'' \24\ See 19 U.S.C. 1862(d).
---------------------------------------------------------------------------
\21\ 19 U.S.C. 1862(b)(3)(A).
\22\ See 19 U.S.C. 1862(d) (``the Secretary and the President
shall, in light of the requirements of national security and without
excluding other relevant factors . . .'' and ``serious effects
resulting from the displacement of any domestic products by
excessive imports shall be considered, without excluding other
factors . . .'').
\23\ This reading is supported by Congressional findings in
other statutes. See, e.g., 15 U.S.C. 271(a)(1)(``The future well-
being of the United States economy depends on a strong manufacturing
base . . .'') and 50 U.S.C. 4502(a)(``Congress finds that--(1) the
security of the United States is dependent on the ability of the
domestic industrial base to supply materials and services . . .
(2)(C) to provide for the protection and restoration of domestic
critical infrastructure operations under emergency conditions . . .
(3) . . . the national defense preparedness effort of the United
States government requires--(C) the development of domestic
productive capacity to meet--(ii) unique technological requirements
. . . (7) much of the industrial capacity that is relied upon by the
United States Government for military production and other national
defense purposes is deeply and directly influenced by--(A) the
overall competitiveness of the industrial economy of the United
States; and (B) the ability of industries in the United States, in
general, to produce internationally competitive products and operate
profitably while maintaining adequate research and development to
preserve competitiveness with respect to military and civilian
production; and (8) the inability of industries in the United
States, especially smaller subcontractors and suppliers, to provide
vital parts and components and other materials would impair the
ability to sustain the Armed Forces of the United States in combat
for longer than a short period.'').
\24\ Accord 50 U.S.C. 4502(a).
---------------------------------------------------------------------------
In addition to ``national defense'' requirements, two of the
factors listed in the second sentence of Section 232(d) are
particularly relevant in this investigation. Both are directed at how
``such quantities'' of imports threaten to impair national security See
19 U.S.C. 1862(b)(3)(A). In administering Section 232, the Secretary
and the President are required to ``take into consideration the impact
of foreign competition on the economic welfare of individual domestic
industries'' and any ``serious effects resulting from the displacement
of any domestic products by excessive imports'' in ``determining
whether such weakening of our internal economy may impair the national
security.'' See 19 U.S.C. 1862(d).
After careful examination of the facts in this investigation, the
Secretary has determined that the present quantities and circumstance
of vanadium imports do not threaten to impair the national security, as
defined in Section 232. Although vanadium is critical to national
security and the United States is currently dependent on imported
sources of vanadium, several significant factors, including the health
of the U.S. industry, availability of idle domestic resources, existing
USG actions, and the importance of vanadium to competitive domestic
steel and titanium industries, indicate that imports of vanadium do not
threaten to impair national security.
III. Investigative Process
A. Initiation of Investigation
On November 19, 2019, AMG Vanadium LLC and U.S. Vanadium LLC
(hereafter ``Applicants'') petitioned the Secretary to conduct an
investigation under Section 232 of the Trade Expansion Act of 1962, as
amended, to determine the effect of imports of vanadium on the national
security.
Upon receipt of the petition, the Department carefully reviewed the
material facts outlined in the petition and held initial discussions
internally as well as with the Department of Defense. Legal counsel at
the Department also carefully reviewed the petition to ensure it met
the requirements of the Section 232 statute and the implementing
regulations. Subsequently, on May 28, 2020, the Department accepted the
petition and initiated the investigation. Pursuant to Section
232(b)(1)(b), the Department notified the U.S. Department of Defense of
its intent to conduct an investigation in a May 21, 2020 letter from
Secretary Ross to then Secretary of Defense, Mark Esper (see Appendix
A).
B. Public Comments
On June 3, 2020, the Department published a Federal Register Notice
(see
[[Page 64755]]
Appendix B--Federal Register, Vol. 85, No. 107, 34179) announcing the
initiation of an investigation to determine the effect of imports of
vanadium on the national security. The notice also announced the
opening of the public comment period. In the notice, the Department
invited interested parties to submit written comments, opinions, data,
information, or advice relevant to the criteria listed in Section 705.4
of the National Security Industrial Base Regulations (15 CFR 705.4) as
they affect the requirements of national security, including the
following:
(a) Quantity of the articles subject to the investigation and other
circumstances related to the importation of such articles;
(b) Domestic production capacity needed for these articles to meet
projected national defense requirements;
(c) The capacity of domestic industries to meet projected national
defense requirements;
(d) Existing and anticipated availability of human resources,
products, raw materials, production equipment, facilities, and other
supplies and services essential to the national defense;
(e) Growth requirements of domestic industries needed to meet
national defense requirements and the supplies and services including
the investment, exploration and development necessary to assure such
growth;
(f) The impact of foreign competition on the economic welfare of
any domestic industry essential to our national security;
(g) The displacement of any domestic products causing substantial
unemployment, decrease in the revenues of government, loss of
investment or specialized skills and productive capacity, or other
serious effects;
(h) Relevant factors that are causing or will cause a weakening of
our national economy; and
(i) Any other relevant factors
The initial public comment period ended on July 20, 2020, and was
followed by a public comment rebuttal period, which ended on August 17,
2020. Following requests from the general public, the Department
published a copy of the Applicants' petition on September 25, 2020 and
opened an additional public comment period, which ended October 9,
2020.
The Department received 32 responsive submissions during the
initial public comment period, which were posted on <a href="http://Regulations.gov">Regulations.gov</a> for
public review and rebuttal filing. The Department received 47 rebuttal
filings from 11 commenters, which were posted on <a href="http://Regulations.gov">Regulations.gov</a> for
public review. During the additional comment period, the Department
received and posted seven comments on <a href="http://Regulations.gov">Regulations.gov</a>.
Parties who submitted comments included representatives of the
domestic vanadium production industry, representatives of the domestic
uranium industry, representatives of the foreign vanadium production
industry, consumers of vanadium products from the steel, titanium, and
energy storage industries, as well as representatives of foreign
governments, and other concerned organizations. The Department
carefully reviewed all of the public comments and factored them into
the investigative process. The public comments of key stakeholders are
summarized in Appendix C, which also includes a link to the docket
number (BIS-2020-0002) under which all public comments can be viewed in
full on <a href="http://Regulations.gov">Regulations.gov</a>.
C. Information Gathering and Data Collection Activities
Due to the limited number of firms engaged in the U.S. vanadium
industry, it was determined that a public hearing was not necessary to
conduct a comprehensive investigation. In lieu of holding a public
hearing on this investigation, the Department issued a separate
mandatory survey (see Appendix E) to participants in the vanadium
production and distribution industry, collecting both qualitative and
quantitative information. The survey was sent to 34 companies with the
ability to develop, produce, or distribute vanadium products for use in
the United States. Eight of these companies did not have locations in
the United States, and were invited to participate in the survey on a
voluntary basis.
The surveys provided a method for respondents to disclose
confidential and non-public information. These surveys, to which
response was mandatory for domestic respondents, were conducted using
statutory authority pursuant to Section 705 of the Defense Production
Act of 1950, as amended (50 U.S.C. 4555) (DPA), and collected detailed
information concerning factors such as imports/exports, production,
capacity utilization, employment, operating status, global competition,
and financial information. The resulting data provided the Department
with detailed industry information that was otherwise not publicly
available and was needed to effectively conduct analysis for this
investigation.
The Department deems the information furnished in the survey
responses confidential and will not publish or disclose it except in
accordance with Section 705 of the DPA, which prohibits the publication
or disclosure of this information unless the President determines that
the withholding of such information is contrary to the interest of the
national defense. Therefore, the information submitted to the
Department in response to the survey will not be shared with any non-
government entity other than in aggregate form.
D. Interagency Consultation
The Department consulted with the Department of Defense's Office of
Industrial Policy and the Defense Logistics Agency, regarding
methodological and policy questions that arose during the
investigation. The Department also consulted with other U.S. Government
agencies with expertise and information regarding the vanadium industry
including the Department of Energy, the Department of State, the Office
of the United States Trade Representative, the Department of Homeland
Security, the Environmental Protection Agency, and the Department of
Interior's U.S. Geological Survey.
IV. Product Scope of Investigation
The scope of this investigation defined vanadium products at the
Harmonized Tariff Schedule of the United States (HTS) 10-digit level.
The nine product categories and related HTS codes covered by this
report are shown below in Figure 1.
Figure 1--Vanadium Product Scope of the Investigation
------------------------------------------------------------------------
10 Digit HTS
Heading/subheading/product code
------------------------------------------------------------------------
Vanadium Oxides......................................... 2825.30.0010
2825.30.0050
Ferrovanadium........................................... 7202.92.0000
Vanadium Carbides....................................... 2849.90.5000
Vanadates............................................... 2841.90.1000
Vanadium Ore and Concentrates........................... 2615.90.6090
Ash and Residues Containing Vanadium.................... 2620.40.0030
2620.99.1000
Vanadium Sulfate........................................ 2833.29.3000
Vanadium Hydrides, Nitrides, Azides, Silicides, and 2850.00.2000
Borides................................................
Vanadium, Unwrought and Wrought......................... 8112.92.7000
8112.99.2000
------------------------------------------------------------------------
Source: United States International Trade Commission and U.S. Department
of Commerce, Bureau of Industry and Security.
[[Page 64756]]
In order to ensure that the full vanadium production process was
covered, these HTS codes include vanadium products as well as vanadium-
containing precursors. Vanadium is most commonly traded as vanadium
oxides (typically vanadium pentoxide (V<INF>2</INF>O<INF>5</INF>)) and
ferrovanadium (FeV), with usage in steelmaking accounting for the vast
majority of consumption.
Detailed information was collected in the Department's survey
responses from U.S. vanadium producers regarding vanadium-containing
products. Data throughout this report is presented, to the extent
possible, in kilograms or metric tons of contained vanadium. For
example, vanadium pentoxide is 56% vanadium by weight, while vanadium
content in ferrovanadium varies from 35% to 80% (though is typically
consistent for a given producer). Prices of vanadium pentoxide, in
keeping with industry conventions, are quoted in U.S. Dollars per pound
of vanadium pentoxide (not vanadium content).
This report also considers the state of industries that depend on
vanadium, in particular the U.S. titanium and steel industries, both of
which manufacture materials that the U.S. government has recognized as
critical to national security. As the Department is aware that the
principal customers of vanadium are steel producers, understanding
potential ramifications on the U.S. steel industry was necessary to
ensure a complete analysis of the effect of vanadium imports on the
national security. Vanadium is also a key element in the production of
titanium alloy products that are critical to national security, with
titanium sponge the subject of a recent Section 232 investigation and
the focus of an ongoing working group. The Secretary's recommendations
consider the interdependence of the U.S. vanadium industry and these
crucial U.S. industries.
V. Background on U.S. Vanadium Industry
A. Vanadium Production
Vanadium is produced through three general methods: primary
production (mining), co-production (from mined ore in concert with
steelmaking), and secondary production (from residues and waste
materials). Nearly all vanadium in the United States is generated
through secondary production, with some vanadium mining occurring
together with uranium mining in sandstone-hosted deposits.
Currently there is one primary producer of vanadium in the United
States: Energy Fuels Resources (USA), Inc. (Energy Fuels). Although
Energy Fuels' vanadium production activities are dependent on vanadium
market prices, the company also may produce vanadium as a by-product of
uranium mining, depending on uranium market prices. The United States
had no primary production of vanadium from 2014 to 2018; Energy Fuels
restarted production in 2019 following a surge in vanadium prices.\25\
The company produced approximately 1.8 million pounds of vanadium
pentoxide in 2019--equivalent to approximately 460,000 kilograms of
contained vanadium--prior to ceasing production ``due to weak vanadium
market conditions.'' \26\ Energy Fuels' production accounted for under
1% of estimated worldwide primary- and co-production in 2019, with the
remainder produced in four countries: China, Russia, South Africa, and
Brazil (see Figure 2).
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\25\ United States Geological Survey Mineral Commodity
Summaries--Vanadium, <a href="https://www.usgs.gov/centers/nmic/vanadium-statistics-and-information">https://www.usgs.gov/centers/nmic/vanadium-statistics-and-information</a>.
\26\ Energy Fuels, Inc. 2019 SEC Form 10-K, <a href="https://www.energyfuels.com/financials">https://www.energyfuels.com/financials</a>.
[[Page 64757]]
Figure 2--Estimated Worldwide Mine Production of Vanadium
[metric tons]
----------------------------------------------------------------------------------------------------------------
Country 2015 2016 2017 2018 2019
----------------------------------------------------------------------------------------------------------------
China........................... 42,000 45,000 40,000 40,000 40,000
Russia.......................... 16,000 16,000 18,000 18,000 18,000
South Africa.................... 12,000 10,000 7,960 7,700 8,000
Brazil.......................... 6,000 8,000 5,210 5,500 7,000
United States................... 0 0 0 0 460
-------------------------------------------------------------------------------
Total....................... 76,000 79,000 71,200 71,200 73,000
----------------------------------------------------------------------------------------------------------------
Source: United States Geological Survey Mineral Commodity Summaries--Vanadium, <a href="https://www.usgs.gov/centers/nmic/vanadium-statistics-and-information">https://www.usgs.gov/centers/nmic/vanadium-statistics-and-information</a>, and Energy Fuels 2019 SEC 10-K filing.
Energy Fuels sold approximately 50,000 of the 460,000 kilograms of
contained vanadium it produced in 2019, with the remainder kept in
inventory.\27\ The company reports that its U.S. mines contain 6.6
million kilograms of measured vanadium content, with another 3.6
million kilograms indicated or inferred.\28\ Energy Fuels also operates
the only U.S. facility that can process both vanadium ore and
conventional uranium, the White Mesa Mill.
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\27\ Energy Fuels, Inc. 2019 Annual Presentation, <a href="https://www.energyfuels.com/presentation">https://www.energyfuels.com/presentation</a>.
\28\ Ibid.
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Two Canada-based companies are in the process of exploring the
development of mines located in the United States. In May 2020, First
Vanadium Corporation announced the results of its Preliminary Economic
Assessment (PEA) for an open pit mine near Carlin, Nevada, and forecast
16 years of vanadium production capabilities totaling 180 million
pounds of vanadium pentoxide, equivalent to 46 million kilograms of
vanadium content.\29\ The second company, Silver Elephant Mining, owns
Nevada Vanadium LLC, which is in the process of developing the
Gibellini vanadium project near Eureka, Nevada. The Gibellini project
is in the permitting process, with the Bureau of Land Management
expected to reach a decision by August 2021.\30\ The company plans to
begin production in late 2023, producing 130 million pounds of vanadium
pentoxide (33 million kilograms of vanadium content) over 14 years.\31\
Other domestic vanadium resources exist, including Western Uranium &
Vanadium's Sunday Mine Complex in Colorado and Anfield Resources'
Velvet-Wood Mine in Utah, both of which have previously produced
vanadium and have the potential to provide primary sources of vanadium,
should market conditions support such production. In 2017, the United
States Geological Survey (USGS) listed a total of 18 vanadium deposits
in the United States, though data was not available on the extent of
the deposits for most.\32\ The identification of most of these deposits
is drawn from assessments carried out in 1968 and 1975 by the American
Institute of Mining, Metallurgical, and Petroleum Engineers and the
U.S. Geological Survey.\33\
---------------------------------------------------------------------------
\29\ ``First Vanadium Announces Positive Preliminary Economic
Assessment for the Carlin Vanadium Project in Nevada'', <a href="https://www.firstvanadium.com/index.php/news/2020/548-irstanadiumnnouncesositivereliminaryconomicsse20200511">https://www.firstvanadium.com/index.php/news/2020/548-irstanadiumnnouncesositivereliminaryconomicsse20200511</a>.
\30\ Bureau of Land Management Accepting Comments for Gibellini
Mine, August 17, 2020. Available at <a href="https://www.blm.gov/press-release/bureau-land-management-accepting-comments-gibellini-mine">https://www.blm.gov/press-release/bureau-land-management-accepting-comments-gibellini-mine</a>.
\31\ Silver Elephant Mining Corporate Presentation: Gibellini
Vanadium, <a href="https://www.silverelephantmining.com/projects/gibellini-vanadium/">https://www.silverelephantmining.com/projects/gibellini-vanadium/</a>.
\32\ Vanadium: Chapter U of Critical Mineral Resources of the
United States--Economic and Environmental Geology Prospects for
Future Supply (2017). <a href="https://pubs.usgs.gov/pp/1802/u/pp1802u.pdf">https://pubs.usgs.gov/pp/1802/u/pp1802u.pdf</a>.
\33\ Fischer, R.P., 1968, The uranium and vanadium deposits of
the Colorado Plateau region, in Ridge, J.D., ed., Ore deposits of
the United States, 1933-1967: New York, N.Y., American Institute of
Mining, Metallurgical, and Petroleum Engineers; Fischer, R.P., 1975,
Geology and resources of base-metal vanadate deposits: U.S.
Geological Survey Professional Paper 926[hairsp]-A, <a href="http://pubs.er.usgs.gov/publication/pp926A">http://pubs.er.usgs.gov/publication/pp926A</a> and Fischer, R.P., 1975,
Vanadium resources in titaniferous magnetite deposits: U.S.
Geological Survey Professional Paper 926-B, <a href="http://pubs.er.usgs.gov/publication/pp926B">http://pubs.er.usgs.gov/publication/pp926B</a>.
---------------------------------------------------------------------------
Worldwide, most vanadium is produced via co-production with
steelmaking, with vanadium-bearing iron ore used in steel furnaces that
produce a vanadium slag that is further converted into vanadium
pentoxide and ferrovanadium. Co-production accounted for 71% of global
vanadium production in 2019.\34\ The concentrations of vanadium-bearing
iron ore in China, Russia, and South Africa have made co-production
more economically feasible in these countries than in others.
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\34\ Bushveld Minerals, About Vanadium, <a href="https://www.bushveldminerals.com/about-vanadium/">https://www.bushveldminerals.com/about-vanadium/</a>.
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The main method of vanadium production in the United States is
secondary production, using fossil fuel spent catalysts, residues, and
ashes as feedstock. Fossil fuels can produce vanadium-bearing waste
both through the use of vanadium catalysts used in the refining process
and in the vanadium-rich residues generated from the burning of fuels
high in vanadium content. After recovery, the spent catalysts and
residues can be processed into vanadium pentoxide and ferrovanadium
(see Figure 3). Secondary production of vanadium accounted for an
estimated 11% of worldwide vanadium production in 2019, with the United
States accounting for roughly one-third of the worldwide total (4% of
total global production).\35\
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\35\ Ibid.
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Both Applicants are secondary producers of vanadium, using
vanadium-bearing waste feedstock to produce vanadium products: AMG
Vanadium operates a facility in Cambridge, Ohio that produces
ferrovanadium, and U.S. Vanadium operates a facility in Hot Springs,
Arkansas that produces vanadium pentoxide. In addition to the
Applicants there is one other domestic secondary vanadium producer:
Gladieux Metals Recycling in Freeport, Texas and one converter:
Evergreen Metallurgical (doing business as Bear Metallurgical Company)
in Butler, Pennsylvania.
AMG Vanadium's Ohio facility, which was originally built by the
Vanadium Corporation of America, dates to 1952. Updates to the facility
in 1970, following a merger with the Foote Mineral Corporation, led to
the use of vanadium bearing slag as the facility's raw material input.
A further overhaul after the acquisition of the facility by Advanced
Metallurgical Group NV in 2007 resulted in AMG Vanadium's current use
of spent catalyst as feedstock.\36\
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\36\ AMG Vanadium: Our History, at <a href="https://amg-v.com/timeline_amg_v/">https://amg-v.com/timeline_amg_v/</a>.
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AMG Vanadium is the country's largest producer of ferrovanadium,
with average annual production from 2016 to 2019 of [TEXT
REDACTED].\37\ As stated above, the company uses vanadium-bearing spent
catalyst as feedstock; [TEXT REDACTED].\38\
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\37\ U.S. Department of Commerce, Bureau of Industry and
Security, Section 232 Investigation into Imports of Vanadium Survey.
\38\ Ibid.
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The completion of a new facility in Zanesville, Ohio (approximately
25 miles from its existing Cambridge facility) will allow AMG Vanadium
to more than double its ferrovanadium production capacity to 5.5
million kilograms per year.\39\ The new facility is expected to be
completed in 2021, at a cost of just over $200 million, and will
support approximately 100 new jobs.\40\ The company has indicated that
its expansion makes sense despite low vanadium prices, based on the
fees it receives from refiners to process spent catalyst, which they
expect to exceed their operating costs in 2021.\41\ [TEXT REDACTED]
\42\
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\39\ AMG Vanadium to Duplicate Ohio Recycling Facility. <a href="https://www.spglobal.com/marketintelligence/en/news-insights/trending/2zqx3jqhyx72gfgkcowuzq2">https://www.spglobal.com/marketintelligence/en/news-insights/trending/2zqx3jqhyx72gfgkcowuzq2</a>.
\40\ AMG Vanadium Constructing a Second Ohio Plant, Investing
More Than $200 Million. <a href="https://www.jobsohio.com/news/posts/amg-vanadium-constructing-a-second-ohio-plant-investing-more-than-200-million/">https://www.jobsohio.com/news/posts/amg-vanadium-constructing-a-second-ohio-plant-investing-more-than-200-million/</a>.
\41\ AMG Annual General Meeting Minutes (May 1, 2019), as
provided in public comments by Bushveld Minerals Limited, available
at <a href="https://www.regulations.gov/document?D=BIS-2020-0002-0013">https://www.regulations.gov/document?D=BIS-2020-0002-0013</a>.
\42\ U.S. Department of Commerce, Bureau of Industry and
Security, Section 232 Investigation into Imports of Vanadium Survey.
---------------------------------------------------------------------------
In October 2019, U.S. Vanadium LLC (U.S. Vanadium) purchased the
vanadium production facility located in Hot Springs, Arkansas, from
EVRAZ Stratcor (Stratcor), which had owned the facility since 2006.
Vanadium production in Hot Springs dates from mining and milling
operations established in 1966 by Union Carbide Corporation, which sold
the mill to Stratcor in 1986 and closed the mine in 1989.\43\
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\43\ Vanadium Mining, Encyclopedia of Arkansas. <a href="https://encyclopediaofarkansas.net/entries/vanadium-mining-5915/">https://encyclopediaofarkansas.net/entries/vanadium-mining-5915/</a>.
---------------------------------------------------------------------------
U.S. Vanadium was the only company to produce vanadium pentoxide in
the United States in 2020, following Energy Fuels' cessation of
production and the ongoing idling of Gladieux Metals Recycling. [TEXT
REDACTED] \44\
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\44\ U.S. Department of Commerce, Bureau of Industry and
Security, Section 232 Investigation into Imports of Vanadium Survey.
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Gladieux Metals Recycling (Gladieux) is the owner of an idle
vanadium production facility in Freeport, Texas, which it purchased out
of bankruptcy from Gulf Chemical and Metallurgical Corporation (Gulf)
in 2017.\45\ Gulf, which was majority-owned by the French company
Eramet, had entered into bankruptcy and idled the vanadium processing
facility as a result of low vanadium and molybdenum prices as well as
the costs arising from environmental challenges. These costs included
11 felony pollution charges and a resulting $2.75 million fine in 2010,
a $7.5 million fine in 2013, and over $50 million in capital
expenditures related to environmental matters.\46\ While the facility
has been idle since 2017, Gladieux has been overhauling operations and
has invested more than [TEXT REDACTED] to increase the plant's
efficiency and make it more environmentally sound.\47\
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\45\ Callahan, Erinn. ``Recycling company buys Gulf Chemical.''
The Facts, May 16, 2017. <a href="https://thefacts.com/news/article_fe738e6b-8b64-54fb-afd0-c66cbe35f63e.html">https://thefacts.com/news/article_fe738e6b-8b64-54fb-afd0-c66cbe35f63e.html</a>.
\46\ Gulf Chemical & Metallurgical Corporation Chapter 11
Bankruptcy Filing, as provided in public comments by Bushveld
Minerals Limited, available at <a href="https://www.regulations.gov/document?D=BIS-2020-0002-0013">https://www.regulations.gov/document?D=BIS-2020-0002-0013</a>.
\47\ Gladieux Metals Recycling. Comment in response to Notice of
Request for Public Comments on Section 232 National Security
Investigation of Imports of Vanadium, July 20, 2020. <a href="https://www.regulations.gov/document?D=BIS-2020-0002-0033">https://www.regulations.gov/document?D=BIS-2020-0002-0033</a>.
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Gladieux expects to restart operations [TEXT REDACTED].\48\ [TEXT
REDACTED]. Gladieux will use spent catalyst as its feedstock; [TEXT
REDACTED].\49\
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\48\ U.S. Department of Commerce, Bureau of Industry and
Security, Section 232 Investigation into Imports of Vanadium Survey.
\49\ Ibid.
---------------------------------------------------------------------------
Bear Metallurgical (Bear) owns a facility in Butler, Pennsylvania,
which [TEXT REDACTED], but converts vanadium pentoxide to
ferrovanadium, primarily on a fee basis for customers.\50\ Bear
reported that [TEXT REDACTED] \51\ Bear produced [TEXT REDACTED].\52\
---------------------------------------------------------------------------
\50\ Often referred to as a tolling arrangement, with Bear as
the ``toller'' and their customers, who provide material to be
converted, as ``tollees.''
\51\ U.S. Department of Commerce, Bureau of Industry and
Security, Section 232 Investigation into Imports of Vanadium Survey.
\52\ Ibid.
---------------------------------------------------------------------------
Prior to declaring bankruptcy in 2016, Bear was a wholly-owned
subsidiary of Gulf Chemical and Metallurgical (Gulf). The company
reported entering into bankruptcy because low vanadium and molybdenum
prices limited their toll conversion volumes, with their reliance on
Gulf being a significant factor; as noted above Gulf itself also
declared bankruptcy in 2016, and subsequently idled vanadium pentoxide
production.\53\ Bear was purchased in 2016 by Yilmaden Holding, a
subsidiary of the Turkey-based Yildirim Group.\54\
---------------------------------------------------------------------------
\53\ Gulf Chemical & Metallurgical Corporation Chapter 11
Bankruptcy Filing, as provided in public comments by Bushveld
Minerals Limited, available at <a href="https://www.regulations.gov/document?D=BIS-2020-0002-0013">https://www.regulations.gov/document?D=BIS-2020-0002-0013</a>.
\54\ Mughal, Sarah. ``Report: Yildirim Unit Wins Tender for Bear
Metallurgical Assets.'' September 11, 2016. S&P Global Market
Intelligence. <a href="https://www.spglobal.com/marketintelligence/en/news-insights/trending/tetcr1ex6irl2ixbbkkqtw2">https://www.spglobal.com/marketintelligence/en/news-insights/trending/tetcr1ex6irl2ixbbkkqtw2</a>.
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[TEXT REDACTED].
[TEXT REDACTED] \55\
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\55\ USGS Vanadium Mineral Commodity Summary, 2020. <a href="https://pubs.usgs.gov/periodicals/mcs2020/mcs2020-vanadium.pdf">https://pubs.usgs.gov/periodicals/mcs2020/mcs2020-vanadium.pdf</a>.
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B. Vanadium Uses
The vast majority of vanadium is used in steelmaking. Estimates for
both U.S. and worldwide usage put the steel industry at 90 to 93% of
total vanadium usage.\56\ The inclusion of small amounts of vanadium--
typically well under 1% of the total volume--into steel adds
``strength, toughness, and wear resistance,'' as well as oxidation
prevention.\57\ The resulting high-strength, low-alloy (HSLA) steel
products are common in the construction industry, particularly in
earthquake-resistant rebar, as well as in buildings, bridges, and
cranes. HSLA steel products are also used in the automotive sector, in
shipbuilding, and in various defense-related uses such as armor
plating.\58\ Additionally, use of vanadium is common in tool steel,
with chromium-vanadium steel commonly used in hand tools with vanadium
concentrations of 0.15 to 0.2%.\59\ Vanadium is also used at
significantly higher concentrations in high speed steel used in cutting
and drilling tools, as well as aerospace applications such as gas
engine turbines, at concentrations that can exceed 5% vanadium.
---------------------------------------------------------------------------
\56\ Vanadium: Chapter U of Critical Mineral Resources of the
United States--Economic and Environmental Geology Prospects for
Future Supply (2017). <a href="https://pubs.usgs.gov/pp/1802/u/pp1802u.pdf">https://pubs.usgs.gov/pp/1802/u/pp1802u.pdf</a>.
\57\ Ibid.
\58\ Ibid.
\59\ Which is better for hand tools? Chromium-Molybdenum or
Chromium-Vanadium Steel. <a href="https://www.tekton.com/crmo-or-crv-steel">https://www.tekton.com/crmo-or-crv-steel</a>.
---------------------------------------------------------------------------
Substitution for vanadium is possible in most steel products.
Molybdenum produces similar mechanical properties in tool steels and is
substituted on the basis of price and the existence of pre-established
supply chains.\60\ In HSLA steels, niobium is a standard substitute for
vanadium, though ``significant technical adjustments to the steel
production process'' are required.\61\ Many Chinese steel mills, for
instance, carried out this substitution in 2018 in response to a surge
in vanadium prices.\62\ Nonetheless, vanadium is generally preferred in
applications such as rebar, though Roskill--a major metal and chemical
industry research and consultancy group--notes that ``once mills are
accustomed to niobium and have made the technical changes, they are
unlikely to fully switch back.'' \63\
---------------------------------------------------------------------------
\60\ Ibid.
\61\ Vanadium: Chapter U of Critical Mineral Resources of the
United States--Economic and Environmental Geology Prospects for
Future Supply (2017). <a href="https://pubs.usgs.gov/pp/1802/u/pp1802u.pdf">https://pubs.usgs.gov/pp/1802/u/pp1802u.pdf</a>.
\62\ Press Release: Roskill: Niobium industry looking for a
future beyond steel. <a href="https://www.globenewswire.com/news-release/2020/02/10/1982500/0/en/Roskill-Niobium-industry-looking-for-a-future-beyond-steel.html">https://www.globenewswire.com/news-release/2020/02/10/1982500/0/en/Roskill-Niobium-industry-looking-for-a-future-beyond-steel.html</a>.
\63\ Vanadium Outlook to 2029, 18th Edition, Publicly available
summary, <a href="https://roskill.com/market-report/vanadium/">https://roskill.com/market-report/vanadium/</a>.
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Compared to its use in steel alloys, the aggregate use of vanadium
in titanium alloys accounts for a much smaller percentage--
approximately 3 to 5% of total vanadium demand--but it is
``irreplaceable in aerospace applications.'' \64\ Most titanium
products contain vanadium; the vanadium is typically incorporated into
the titanium melt process as a master alloy that is 65% vanadium and
35% aluminum, producing a variety of titanium mill products. The most
common is Ti-6Al-4V, a product that is 4% vanadium by weight and
between 12 and 14% by cost.\65\ Other titanium alloys contain up to 15%
vanadium by weight.
---------------------------------------------------------------------------
\64\ Vanadium: Chapter U of Critical Mineral Resources of the
United States--Economic and Environmental Geology Prospects for
Future Supply (2017). <a href="https://pubs.usgs.gov/pp/1802/u/pp1802u.pdf">https://pubs.usgs.gov/pp/1802/u/pp1802u.pdf</a>.
\65\ Titanium Metals Corporation Public Comment on Section 232
National Security Investigation of Imports of Vanadium. Available at
<a href="https://www.regulations.gov/document?D=BIS-2020-0002-0019">https://www.regulations.gov/document?D=BIS-2020-0002-0019</a>.
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Most titanium products are used in the aerospace and military
sectors, which account for approximately two-thirds of titanium mill
product demand.\66\ Titanium accounts for approximately 14% of the
Boeing 787 airframe, for instance, and up to 39% of the weight of F-22
fighter jet.\67\ Other national security titanium applications include
ship components, military ground vehicles, and armor. Industrial use of
titanium accounts for approximately 25% of demand; vanadium is used in
the chemical industry, power plants, and desalination plants, but these
sectors are more likely to use unalloyed ``commercially pure''
titanium.
---------------------------------------------------------------------------
\66\ Olin, Chris. Titanium Market Update: Highlighting Global
Trends in 2017. Longbow Research.
\67\ Boeing 787: From the Ground Up. <a href="https://www.boeing.com/commercial/aeromagazine/articles/qtr_4_06/article_04_2.html">https://www.boeing.com/commercial/aeromagazine/articles/qtr_4_06/article_04_2.html</a> and U.S.
Department of Commerce. Bureau of Industry and Security. The Effect
of Imports of Titanium Sponge on the National Security.
---------------------------------------------------------------------------
The primary remaining vanadium uses, accounting for 2 to 4% of
total vanadium demand, are categorized as chemical or non-metallurgical
use. One key non-metallurgical use is in catalysts, with vanadium-based
products being the most common catalysts used for selective catalytic
reduction to reduce the production of nitrogen oxides in industrial
power plants.\68\ Vanadium is used as a catalyst in the production of
sulfuric acid, itself an important industrial material used in the
production of fertilizer, pulp and paper, titanium dioxide, cellulosic
fibers and plastics, explosives, electronic chips, batteries, and
pharmaceuticals.\69\ Consumption of sulfuric acid is ``regarded as one
of the best indexes of a nation's industrial development.'' \70\ A
significant national security use of vanadium within the chemical
industry is in longwave-infrared (LWIR) imaging, used for night vision
and targeting systems. Vanadium oxide is the most frequently used
material in the bolometers supporting LWIR imaging.\71\
---------------------------------------------------------------------------
\68\ Types of Catalysts for SCR Operations, <a href="https://sviindustrial.com/2020/04/08/types-of-catalysts-for-scr-operations/">https://sviindustrial.com/2020/04/08/types-of-catalysts-for-scr-operations/</a>.
\69\ PubChem Sulfuric acid compound summary, NIH National
Library of Medicine, National Center for Biotechnology Information.
<a href="https://pubchem.ncbi.nlm.nih.gov/compound/Sulfuric-acid#section=Uses">https://pubchem.ncbi.nlm.nih.gov/compound/Sulfuric-acid#section=Uses</a>.
\70\ National Mineral Information Center, Sulfur Statistics and
information. <a href="https://www.usgs.gov/centers/nmic/sulfur-statistics-and-information">https://www.usgs.gov/centers/nmic/sulfur-statistics-and-information</a>.
\71\ Andrew Voshell, Nibir Dhar, Mukti M. Rana, ``Materials for
microbolometers: vanadium oxide or silicon derivatives,'' Proc. SPIE
10209, Image Sensing Technologies: Materials, Devices, Systems, and
Applications IV, 102090M (28 April 2017); doi: 10.1117/12.2263999.
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[[Page 64762]]
An additional chemical use of vanadium is in large scale batteries.
This accounts for a very small percentage of current usage--estimated
well under 1% of total demand--but is an area in which some researchers
have seen potential for significant expansion. Vanadium redox flow
batteries (VRBs) were first patented in 1986, and VRB technology was
advanced by Pacific Northwest National Laboratory in 2011,
significantly shrinking the size of the batteries and increasing
temperature tolerance.\72\ These batteries have attributes that make
them valuable for use in energy grids such as longer life cycles, lack
electrolyte cross-contamination, and the ability to remain idle without
losing capacity.\73\ The vanadium accounts for approximately 30% of the
cost of a vanadium redox flow battery, requiring between 3 and 6
kilograms of vanadium per kilowatt-hour of energy storage.\74\
Estimates of the potential market growth of the vanadium redox flow
battery vary wildly, from minimal amounts to estimates exceeding 40%
compound annual growth.\75\ To date, use of vanadium redox flow
batteries has not shown sharp growth, in part due to cost. As the
Department of Energy noted as part of its 2020 Energy Storage Grand
Challenge Draft Roadmap, ``future capital cost reductions will require
replacing vanadium with lower cost raw materials to approach the $100/
kWh targets required for wider-scale deployment of energy storage.''
\76\
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\72\ Yang, Z Gary. It's Big and Long-Lived, and It Won't Catch
Fire: The Vanadium Redox-Flow Battery. IEEE Spectrum, October 26,
2017. <a href="https://spectrum.ieee.org/green-tech/fuel-cells/its-big-and-longlived-and-it-wont-catch-fire-the-vanadium-redoxflow-battery">https://spectrum.ieee.org/green-tech/fuel-cells/its-big-and-longlived-and-it-wont-catch-fire-the-vanadium-redoxflow-battery</a>.
\73\ Vanadium Redox Flow Batteries: Improving the performance
and reducing the cost of vanadium redox flow batteries for large-
scale energy storage. October 2013. U.S. Department of Energy
Electricity Delivery & Energy Reliability, Energy Storage Program.
Available at <a href="https://www.energy.gov/sites/prod/files/VRB.pdf">https://www.energy.gov/sites/prod/files/VRB.pdf</a>.
\74\ Energy Storage & Vanadium Redox Flow Batteries 101,
November 13, 2018. <a href="http://www.bushveldminerals.com/wp-content/uploads/2018/11/Energy-Storage-Vanadium-Redox-Flow-Batteries-101.pdf">http://www.bushveldminerals.com/wp-content/uploads/2018/11/Energy-Storage-Vanadium-Redox-Flow-Batteries-101.pdf</a>.
\75\ Ibid.
\76\ Department of Energy, ``Energy Storage Grand Challenge
Draft Roadmap'', available at <a href="https://www.energy.gov/energy-storage-grand-challenge/energy-storage-grand-challenge">https://www.energy.gov/energy-storage-grand-challenge/energy-storage-grand-challenge</a>.
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VI. Global Vanadium Industry Conditions
A. Overview
Primary and co-production of vanadium is largely undertaken in four
countries: China, Russia, South Africa, and Brazil (see Figure 5). In
addition to these countries, the United States Geological Survey (USGS)
lists known reserves in the United States and Australia. Worldwide
resources significantly exceed known reserves, which are considered ``a
working inventory of mining companies' supplies of an economically
extractable mineral commodity;'' global reserves are estimated at 22
million metric tons, with world vanadium resources estimated to exceed
63 million metric tons.\77\
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\77\ United States Geological Survey Mineral Commodity
Summaries--Vanadium, <a href="https://www.usgs.gov/centers/nmic/vanadium-statistics-and-information">https://www.usgs.gov/centers/nmic/vanadium-statistics-and-information</a>.
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Countries other than the United States that are in the process of
developing significant reserves include Canada and Kazakhstan.
Australia already maintains notable vanadium reserves, which it is
seeking to expand, but does not have any recorded mine production. The
Government of Australia reports nine vanadium production projects
underway, with five of these at advanced stages of exploration, and
some vanadium production possible in 2021.\78\ One mine--the Windimurra
mine--completed a feasibility study in April 2020 and expects to
produce 4,250 tons of vanadium content annually.\79\ The Windimurra
mine has successfully produced vanadium in the past, operating from
1999 to 2003 with an annual production capacity of 3,000 tons contained
vanadium.\80\ Four other Australian projects are in the process of
permitting, design, or pilot studies with a total potential annual
production of 22,000 tons of contained vanadium.\81\
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\78\ Submission from the Australian Government to the United
States Department of Commerce, Section 232 National Security
Investigation into Imports of Vanadium, submitted to <a href="https://www.regulations.gov">https://www.regulations.gov</a>, docket BIS-2020-0002 July 20, 2020.
\79\ Ibid.
\80\ United States Geological Survey, Vanadium Minerals Yearbook
reports. Available at <a href="https://www.usgs.gov/centers/nmic/vanadium-statistics-and-information">https://www.usgs.gov/centers/nmic/vanadium-statistics-and-information</a>.
\81\ Submission from the Australian Government to the United
States Department of Commerce, Section 232 National Security
Investigation into Imports of Vanadium, submitted to <a href="https://www.regulations.gov">https://www.regulations.gov</a>, docket BIS-2020-0002 July 20, 2020.
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[[Page 64764]]
Several mining projects for vanadium-bearing iron ore in Canada are
in exploratory phases. Two are in the Lac Dor[eacute] area of
Qu[eacute]bec, with partial funding provided by the government of
Qu[eacute]bec. One of the two, operated by BlackRock Metals, plans to
begin operations in 2021, with cast iron and ferrovanadium as the main
products.\82\ This project is expected to yield 5,200 tons of
ferrovanadium annually with 80% vanadium content, to be processed at a
nearby facility.\83\ The second company, VanadiumCorp Resources, is in
the exploration phase, with drill testing programs completed in 2019
and a mineral resource estimate completed in October 2020.\84\ The
estimate showed 8 million metric tons of measured magnetite concentrate
at 1.2% vanadium pentoxide content, equal to 56,000 tons of contained
vanadium, with an additional 324,000 tons indicated and 155,000 tons
inferred.\85\ A third Canadian company, Vanadium One Iron Corporation,
released the results of its PEA in February 2020 for its Mont Sorcier
property in Qu[eacute]bec, anticipating the ability to produce five
million tons of ore per year with a 0.6% vanadium pentoxide
content.\86\
---------------------------------------------------------------------------
\82\ ``M[eacute]taux BlackRock a un client pour son titane'',
Radio-Canada, May 8, 2019, <a href="https://ici.radio-canada.ca/nouvelle/1168744/ferrovanadium-usine-saguenay-client-mine-chibougamau">https://ici.radio-canada.ca/nouvelle/1168744/ferrovanadium-usine-saguenay-client-mine-chibougamau</a>.
\83\ ``BlackRock Project: Iron Ore Exploitation at lac
Dor[eacute]'', <a href="https://iaac-aeic.gc.ca/050/documents/p62105/90319E.pdf">https://iaac-aeic.gc.ca/050/documents/p62105/90319E.pdf</a>.
\84\ VanadiumCorp Lac Dor[eacute] Vanadium Project, <a href="http://www.vanadiumcorp.com/projects/lac-dore-vanadium-project/">http://www.vanadiumcorp.com/projects/lac-dore-vanadium-project/</a>.
\85\ VanadiumCorp Reports Lac Dore Mineral Resource Estimate
(MRE). October 29, 2020. <a href="https://www.vanadiumcorp.com/releases/vanadiumcorp-reports-the-lac-dore-mineral-resource-estimate-mre-2/">https://www.vanadiumcorp.com/releases/vanadiumcorp-reports-the-lac-dore-mineral-resource-estimate-mre-2/</a>.
\86\ Vanadium One Iron Corporation PEA Results, February 2020,
<a href="https://www.vanadiumone.com/pea-results/">https://www.vanadiumone.com/pea-results/</a>.
Figure 6--Estimated New Mine Production Potential of Select Vanadium Projects in Canada and Australia
[In metric tons contained vanadium]
----------------------------------------------------------------------------------------------------------------
Estimated
Country Project Status Estimated annual
reserves production
----------------------------------------------------------------------------------------------------------------
Australia...................... Atlantic Vanadium: In Development........ 131,936 4,256
Windimurra Mine.
Australia...................... Multicom: Saint Elmo Finalizing 112,000 5,600
Mine. Environmental
Approvals.
Australia...................... Australian Vanadium Feasibility Study..... 97,152 5,715
Ltd: Australian
Vanadium Project.
Australia...................... TNG Limited: Mount Engineering Design.... 124,320 3,360
Peake Mine.
Australia...................... Technology Metals Feasibility Study 114,688 7,168
Australia: Gabanintha Completed 2019.
Mine.
-------------------------------------------------------
Australia...................... Total.................. ...................... 580,096 26,099
Canada......................... BlackRock Metals: Authorized............ 176,439 4,152
Chibougamou Mine.
Canada......................... VanadiumCorp Resources: Mineral Resource 379,273 10,306
Lac Dor[eacute] Estimate Complete.
Project.
Canada......................... VanadiumOne: Mont Preliminary Economic 117,600 16,800
Sorcier Project. Analysis Complete.
-------------------------------------------------------
Canada......................... Total.................. ...................... 673,312 31,258
----------------------------------------------------------------------------------------------------------------
Sources:
Submission from the Australian Government to the United States Department of Commerce, Section 232 National
Security Investigation into Imports of Vanadium, submitted to <a href="https://www.regulations.gov">https://www.regulations.gov</a>, docket BIS-2020-
0002 July 20, 2020.
BlackRock Mining Project Summary. Available at <a href="https://comexqc.ca/en/fiches-de-projet/projet-dexploitation-dun-gisement-fer-vanadium-metaux-blackrock-inc/">https://comexqc.ca/en/fiches-de-projet/projet-dexploitation-dun-gisement-fer-vanadium-metaux-blackrock-inc/</a>.
VanadiumCorp Reports Lac Dor[eacute] Mineral Resource Estimate. October 29, 2020. Available at <a href="https://www.vanadiumcorp.com/releases/vanadiumcorp-reports-the-lac-dore-mineral-resource-estimate-mre-2/">https://www.vanadiumcorp.com/releases/vanadiumcorp-reports-the-lac-dore-mineral-resource-estimate-mre-2/</a>.
VanadiumOne Iron Corp. Preliminary Economic Analysis Results, February 2020. Available at <a href="https://www.vanadiumone.com/pea-results/">https://www.vanadiumone.com/pea-results/</a>.
In Kazakhstan, the Ferro-Alloy Resources Group, based in Guernsey
and listed on the London and Astana International Stock Exchanges, owns
Firma Balusa, LLP, which holds the rights to the Balasausqandiq
vanadium deposit in the southern part of the country. The site
currently has minimal vanadium production, but has rapid expansion
plans, forecasting in 2019 reaching production levels of 4,000 tons
contained vanadium in 2020 and 13,000 tons in 2023.\87\ The projected
2023 production would make Kazakhstan the world's third leading
producer of mined vanadium based on current totals. The company's
production levels appear significantly behind its initial plans,
attributed primarily to the COVID-19 pandemic; through August of 2020
the company indicated it had produced 168 tons of vanadium pentoxide
(94 tons contained vanadium) from secondary concentrate, and indicated
the development of the Balasausqandiq deposit was ongoing.\88\ The
company says it ``plans to become the world's lowest cost primary
producer.'' \89\
---------------------------------------------------------------------------
\87\ Ferro-Alloy Resources Ltd Corporate Presentation, March
2019. <a href="http://ferro-alloy.com/en/news/FAR%20-%20Corporate%20Presentation%20-%20%20update%20March%202019.pdf">http://ferro-alloy.com/en/news/FAR%20-%20Corporate%20Presentation%20-%20%20update%20March%202019.pdf</a>.
\88\ Ferro-Alloy Resources Unaudited interim financial results
for the six months to 30 June 2020. <a href="http://www.ferro-alloy.com/en/investors/financials/">http://www.ferro-alloy.com/en/investors/financials/</a>.
\89\ Ferro-Alloy Resources Corporate Profile. <a href="http://www.ferro-alloy.com/en/company/corporate-profile/">http://www.ferro-alloy.com/en/company/corporate-profile/</a>.
---------------------------------------------------------------------------
Beyond the estimated 73,000 tons of mine-produced vanadium reported
worldwide in 2019, secondary production added as much as 30,000 tons to
worldwide totals, with most of the additional production in the U.S.,
Germany, Austria, Japan, and Taiwan.\90\ Significant producers outside
of the U.S. include Treibacher in Austria, AMG Technologies in Germany,
Shinko Chemical, Taiyo Koko, and Metal Technology in Japan, and Hong
Jing Environment, Plum Movax, and Full Yield Industry of Taiwan.
Interest in secondary production has risen in recent years as tightened
environmental controls on fuels has increased interest in processing
spent catalyst and fossil fuel residues. In addition to their U.S.
expansion, AMG is exploring the
[[Page 64765]]
construction of facilities in Saudi Arabia and China to process
catalysts from those regions.\91\
---------------------------------------------------------------------------
\90\ Based on USGS estimates and Perles, Terry. Vanadium Market
Fundamentals: China's 2019 4th International Vanadium Forum Chengdu,
Sichuan, China. April 13, 2019. Submitted as public comment by
Treibacher Industrie, July 20, 2020. Available at <a href="https://www.regulations.gov/document?D=BIS-2020-0002-0026">https://www.regulations.gov/document?D=BIS-2020-0002-0026</a>.
\91\ AMG 2019 Annual Report. Available at <a href="https://ig9we1q348z124x3t10meupc-wpengine.netdna-ssl.com/wp-content/uploads/AMG-Annual-Report-Web-FINAL.pdf">https://ig9we1q348z124x3t10meupc-wpengine.netdna-ssl.com/wp-content/uploads/AMG-Annual-Report-Web-FINAL.pdf</a> and Shell & AMG Recycling B.V. Sign
Agreement with Shandong Yulong Petrochemical Co., Ltd to Assess
Building a Spent Residue Upgrading Catalyst Recycling Facility.
Available at <a href="https://www.globenewswire.com/news-release/2020/10/26/2114333/0/en/Shell-AMG-Recycling-B-V-Sign-Agreement-with-Shandong-Yulong-Petrochemical-Co-Ltd-to-Assess-Building-a-Spent-Residue-Upgrading-Catalyst-Recycling-Facility.html">https://www.globenewswire.com/news-release/2020/10/26/2114333/0/en/Shell-AMG-Recycling-B-V-Sign-Agreement-with-Shandong-Yulong-Petrochemical-Co-Ltd-to-Assess-Building-a-Spent-Residue-Upgrading-Catalyst-Recycling-Facility.html</a>.
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BILLING CODE 3510-33-C
While China accounts for an estimated 50 to 60% of global vanadium
production, exports of vanadium from China constitute only
approximately 15% of worldwide vanadium exports, because most Chinese
production is consumed domestically in the steel industry. Primary
producers South Africa and Brazil, as well as European Union countries,
which represent a much larger share of global vanadium exports than
production. The European Union alone accounts for over one-quarter of
global exports of contained vanadium (see Figure 8).
Figure 8--Estimated 2019 Share of Production and Exports of Vanadium Content in Vanadium Pentoxide and
Ferrovanadium
----------------------------------------------------------------------------------------------------------------
Estimated 2019 share of Estimated 2019 share of
Country world production (%) world exports (%)
----------------------------------------------------------------------------------------------------------------
China......................................................... 55 15
Russia........................................................ 18 15
European Union Countries *.................................... 9 27
South Africa.................................................. 8 13
Brazil........................................................ 7 13
United States................................................. 4 4
Japan......................................................... 2 1
India......................................................... 1 1
South Korea................................................... <1 7
[[Page 64766]]
Taiwan........................................................ <1 2
Thailand...................................................... <1 1
Canada........................................................ <1 2
----------------------------------------------------------------------------------------------------------------
Sources: U.S. Geological Survey, TTP Squared, Bureau of Industry and Security, IHS Markit Global Trade Atlas.
* Includes exports within the European Union.
Vanadium production generally results first in vanadium pentoxide,
which may be exported or further processed into ferrovanadium for use
in steel. A large portion of the difference between world production
and export share for E.U. countries results from their import of
vanadium oxides--principally from Russia--for conversion into
ferrovanadium, which was then exported (see Figure 9). In fact, nearly
all Russian exports of vanadium oxide went to the Czech Republic, home
to EVRAZ Nikom, one of the E.U.'s main producers of ferrovanadium.
Figure 9--Top World Trade Pairings 2016-2019: Vanadium Oxides (HTS 2825.30)
[In tons vanadium oxide]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Share of Share of
Exporter Importer 2016 2017 2018 2019 country's world exports
exports (%) (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Russia............................ Czech Republic...... 6,656 8,656 8,676 9,683 99 23
South Africa...................... Netherlands......... 3,415 3,225 3,871 3,711 56 10
China............................. South Korea......... 3,140 4,620 3,186 2,750 47 9
Brazil............................ Netherlands......... 1,740 4,343 4,039 3,380 37 9
Brazil............................ South Korea......... 3,640 1,460 660 2,320 22 5
South Korea....................... Japan............... 1,181 2,357 1,840 2,051 73 5
South Africa...................... United States....... 1,676 1,744 1,603 1,521 26 4
Brazil............................ United States....... 660 1,377 2,442 1,993 18 4
China............................. Netherlands......... 2,376 1,860 1,199 615 21 4
Netherlands....................... Austria............. 2 46 3,100 1,773 75 3
Brazil............................ Canada.............. 980 940 1,320 1,340 13 3
China............................. Japan............... 926 720 917 722 11 2
China............................. United States....... 930 565 639 69 8 1
Brazil............................ Japan............... 680 440 440 440 6 1
China............................. Canada.............. 120 420 599 510 6 1
South Africa...................... Japan............... 267 244 391 560 6 1
Taiwan............................ United States....... 533 510 57 126 38 1
Thailand.......................... India............... 60 320 520 240 55 1
Brazil............................ India............... 260 660 200 0 3 1
South Africa...................... India............... 0 0 486 480 4 1
-----------------------------------------------------------------------------------------------
All Countries..................... All Countries....... 33,293 37,220 39,074 38,719 .............. ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: IHS Markit Global Trade Atlas.
Czech ferrovanadium, in turn, was exported principally to the
United States, Japan, Netherlands, and Germany (see Figure 10). Other
major exporters of ferrovanadium include the Netherlands (the principal
importer of South African vanadium oxide), South Korea (the principal
importer of Chinese vanadium oxides), and China which, despite
exporting a relatively small percentage of their production still
accounts for a major portion of global exports due to the sheer size of
their production.
Figure 10--Top World Trade Pairings 2016-2019: Ferrovanadium (HTS 7202.92)
[In tons ferrovanadium]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Share of Share of
Exporter Importer 2016 2017 2018 2019 country's world exports
exports (%) (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Netherlands....................... Germany............. 1,902 1,832 3,758 1,913 28 7
South Africa...................... Netherlands......... 2,112 1,662 1,563 1,579 59 5
China............................. Netherlands......... 2,380 1,540 1,549 930 28 5
South Korea....................... Netherlands......... 1,364 1,714 1,543 1,333 53 4
China............................. Japan............... 1,467 1,323 1,635 1,370 25 4
China............................. South Korea......... 975 995 1,667 1,661 23 4
[[Page 64767]]
Czech Republic.................... United States....... 1,016 940 1,045 1,691 18 3
Netherlands....................... United States....... 1,398 186 2,091 893 13 3
Czech Republic.................... Japan............... 1,025 740 1,020 806 14 3
Netherlands....................... Italy............... 718 895 1,039 523 9 2
China............................. Taiwan.............. 1,109 595 787 644 14 2
Canada............................ United States....... 142 767 869 1,266 91 2
United States..................... Canada.............. 474 295 1,403 843 59 2
Czech Republic.................... Netherlands......... 870 457 270 1,184 11 2
Czech Republic.................... Germany............. 1,162 1,009 361 247 11 2
Netherlands....................... Spain............... 784 654 484 175 6 2
South Africa...................... Japan............... 312 404 605 640 17 1
South Korea....................... Japan............... 596 258 459 601 17 1
Russia............................ Netherlands......... 404 700 360 420 32 1
United States..................... Mexico.............. 304 266 642 315 30 1
-----------------------------------------------------------------------------------------------
All Countries..................... All Countries....... 33,477 30,849 39,300 32,367 .............. ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: IHS Markit Global Trade Atlas.
In recent years, the global vanadium market has been subject to
severe price fluctuations. Three times since 2004 the benchmark
vanadium pentoxide price has more than doubled in under a year, after
which a precipitous drop to more typical price levels occurs (see
Figure 11). These rapid price changes have led to a history of
investment and expansion during price spikes and plant idlings and
bankruptcies in market economies during and following price drops.
Starting new primary production has been especially challenging, as new
mining ventures can take many years to progress through exploration and
permitting to production. The Windimurra mine in Australia, for
instance, is in the midst of its fourth re-opening attempt since 1999,
having operated from 2000 to 2003, invested in reopening from 2005 to
2009 that ultimately failed to materialize, reopening with new
ownership from 2012 to 2014, and currently under development by a new
owner.\92\
---------------------------------------------------------------------------
\92\ McKinnon, Stuart. Vanadium Price Boom Offers Hope of
WIndimurra Revival. The West Australian, April 2, 2018. Available at
<a href="https://thewest.com.au/business/mining/vanadium-price-boom-offers-hope-of-windimurra-revival-ng-b88792684z">https://thewest.com.au/business/mining/vanadium-price-boom-offers-hope-of-windimurra-revival-ng-b88792684z</a>.
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[[Page 64768]]
[GRAPHIC] [TIFF OMITTED] TN18NO21.086
Compared to primary production facilities, secondary production
facilities can have less extended lead times, but still take years to
complete. The establishment of AMG Vanadium's new facility in Ohio was
announced in October 2018, broke ground in August 2019, and is expected
to be completed in 2021.\93\ The Gladieux facility in Freeport, Texas
was purchased in 2017 and is not yet operational.
---------------------------------------------------------------------------
\93\ AMG Vanadium Muskingum County Facility website. <a href="https://amg-v.com/muskingumfacility/">https://amg-v.com/muskingumfacility/</a>.
---------------------------------------------------------------------------
B. Prior Trade Investigations
The U.S. government has previously taken action against
artificially low-priced vanadium product imports. Several antidumping
investigations conducted by the Department of Commerce and the USITC
affirm that sources of imported ferrovanadium from nearly all countries
that mine vanadium ore have engaged in dumping that injures U.S.
producers. Among the significant miners of vanadium ore, only Brazil
has not been subject to an antidumping finding. AMG Vanadium (or its
predecessor) has been a petitioner for all ferrovanadium antidumping
cases, joined by Bear, Gulf, and Stratcor (or its predecessor) for the
petitions on China, South Africa, and Korea. Figure 12 lists USITC
investigations into vanadium imports since 1995:
Figure 12--U.S. International Trade Commission Vanadium Cases Since 1995
----------------------------------------------------------------------------------------------------------------
Investigation Date Finding
----------------------------------------------------------------------------------------------------------------
Ferrovanadium and Nitrided Vanadium from July 30, 1995............................. Affirmative.
Russia.
Ferrovanadium and Nitrided Vanadium from May 15, 2001.............................. Affirmative.
Russia (First Review).
Ferrovanadium from China and South Africa January 28, 2003.......................... Affirmative.
Ferrovanadium and Nitrided Vanadium from September 28, 2006........................ Affirmative.
Russia (Second Review).
Ferrovanadium from China and South Africa November 24, 2008......................... Affirmative.
(First Review).
Ferrovanadium from China and South Africa January 28, 2015.......................... Affirmative.
(Second Review).
Ferrovanadium and Nitrided Vanadium from August 22, 2012........................... Negative.
Russia (Third Review).
Ferrovanadium from Korea................. March 17, 2017............................ Affirmative.
Ferrovanadium from China and South Africa August 7, 2020............................ Affirmative.
(Third Review).
----------------------------------------------------------------------------------------------------------------
Source: United States International Trade Commission.
Russia
In July 1995, the Department of Commerce found that imports of
ferrovanadium and nitrided vanadium from Russia were sold in the United
States at less than fair value, and the USITC found that the dumped
imports were materially injuring the U.S. industry. In the course of
the
[[Page 64769]]
investigation, USITC determined that ferrovanadium and nitrided
vanadium, despite having somewhat disparate end uses, constituted a
single like product based on the significant vanadium content and
generally interchangeable use in steel alloys.\94\
---------------------------------------------------------------------------
\94\ U.S. International Trade Commission. Ferrovanadium and
Nitrided Vanadium from Russia. Investigation No. 731-TA-702, Final.
<a href="https://www.usitc.gov/publications/701_731/pub2904.pdf">https://www.usitc.gov/publications/701_731/pub2904.pdf</a>.
---------------------------------------------------------------------------
This affirmative finding was renewed following the Department of
Commerce's and USITC's first five-year review of the antidumping duty
order in May 2001, as well as the second five-year review in September
2006. At the third set of five-year reviews completed in August 2012,
the USITC noted there had been no subject imports since 1996, and that
in the case of nitrided vanadium there had been no U.S. production
since 1992.\95\ However, while there were no imports of ferrovanadium
from Russia during the time period, there were imports of Russian
vanadium pentoxide, which were then converted to ferrovanadium in the
U.S., as well as imports of ferrovanadium from Russian-owned EVRAZ
Nikom in the Czech Republic, made from Russian-sourced vanadium
pentoxide.\96\
---------------------------------------------------------------------------
\95\ U.S. International Trade Commission. Ferrovanadium and
Nitrided Vanadium from Russia. Investigation No. 731-TA-702 (Third
Review). <a href="https://www.usitc.gov/publications/701_731/pub4345.pdf">https://www.usitc.gov/publications/701_731/pub4345.pdf</a>.
\96\ Ibid.
---------------------------------------------------------------------------
The USITC's third review found, contrary to the prior reviews, that
imports of ferrovanadium from Russia would not be likely to
significantly increase if the antidumping order was revoked. The
decision noted that Russian capacity and production had declined from
prior significant excesses, with less focus on exporting
ferrovanadium.\97\ The report also noted the increased tendency to
supply the U.S. market with vanadium pentoxide, rather than the subject
product ferrovanadium. On this basis, the antidumping order against
Russian ferrovanadium was revoked in October 2011.
---------------------------------------------------------------------------
\97\ Ibid.
---------------------------------------------------------------------------
China and South Africa
In January 2003 the Department of Commerce determined that imports
of ferrovanadium from China and South Africa were sold in the United
States at less than fair value and the USITC found that the dumped
imports were materially injuring the U.S. industry. In the first sunset
reviews (completed November 2008), second sunset reviews (completed
January 2015), and third sunset reviews (completed August 2020), the
Department of Commerce and the USITC determined that revocation of the
existing antidumping duty orders on ferrovanadium from China and South
Africa would likely lead to continuation or recurrence of dumping and
material injury to an industry in the United States within a reasonably
foreseeable time.\98\
---------------------------------------------------------------------------
\98\ Ferrovanadium from the People's Republic of China and the
Republic of South Africa: Continuation of Antidumping Duty Orders,
73 FR 77609, December 19, 2008; Ferrovanadium From the People's
Republic of China and the Republic of South Africa: Continuation of
Antidumping Duty Orders, 80 FR 8607, February 18, 2015;
Ferrovanadium From the Republic of South Africa and the People's
Republic of China: Continuation of Antidumping Duty Orders, 85 FR
51408, August 20, 2020.
---------------------------------------------------------------------------
Following the imposition of the antidumping order in 2002, imports
of ferrovanadium from China fell from an average of 497,000 kilograms
of contained vanadium per year from 1999 to 2001 to ``zero or close to
zero in every year since 2002.'' \99\ USITC cited China's status as the
world's largest producer of ferrovanadium and its continued increases
in capacity as reasons for an affirmative injury finding.
---------------------------------------------------------------------------
\99\ U.S. International Trade Commission. Ferrovanadium and
Nitrided Vanadium from China and South Africa. Investigation Nos.
731-TA-986-987 (Third Review). <a href="https://www.usitc.gov/publications/701_731/pub5099.pdf">https://www.usitc.gov/publications/701_731/pub5099.pdf</a>.
---------------------------------------------------------------------------
Imports of ferrovanadium from South Africa showed similar declines
following the initial antidumping order. From an average of 758,000
kilograms of vanadium content per year from 1999 to 2001, by 2003
imports had fallen to account for no more than 0.1% of U.S. market
share.\100\ As was the case with Russian providers, since the
imposition of antidumping duties South African vanadium has continued
to enter the United States in other forms not subject to antidumping
duties, such as vanadium pentoxide and nitrided vanadium.
---------------------------------------------------------------------------
\100\ Ibid.
---------------------------------------------------------------------------
Korea
In March 2017 the Department of Commerce determined that imports of
ferrovanadium from Korea were sold in the United States at less than
fair value and the USITC found that the dumped imports were materially
injuring the U.S. industry. Unlike Russia, China, and South Africa,
Korea is not a significant source of vanadium production. Rather, the
USITC noted that Korean ferrovanadium was produced primarily from
vanadium pentoxide originally sourced from China.\101\ The USITC found
that ferrovanadium from Korea was sold in the United States in
``increasing and significant volume . . . at declining prices.'' \102\
---------------------------------------------------------------------------
\101\ U.S. International Trade Commission. Ferrovanadium and
Nitrided Vanadium from Korea. Investigation Nos. 731-TA-1315.
<a href="https://www.usitc.gov/publications/701_731/pub4683.pdf">https://www.usitc.gov/publications/701_731/pub4683.pdf</a>.
\102\ Ibid.
---------------------------------------------------------------------------
C. U.S. Duties on Vanadium Imports
As of November 2020, all vanadium products in the scope of this
investigation, with the exception of vanadium ore and concentrates
(Harmonized Tariff Schedule of the United States (HTSUS) 2615.90.6090)
and ash and residues containing vanadium (HTSUS 2620.40.0030 and
2620.99.1000) are subject to duties between 2 and 5.5% (see Figure 13).
Figure 13--Duties on Vanadium Products
------------------------------------------------------------------------
10 Digit HTS
Heading/subheading/product code Duty (percent)
------------------------------------------------------------------------
Vanadium Oxides......................... 2825.30.0010 5.5
2825.30.0050 5.5
Ferrovanadium........................... 7202.92.0000 * 4.2
Vanadium Carbides....................... 2849.90.5000 3.7
Vanadates............................... 2841.90.1000 5.5
Vanadium Ore and Concentrates........... 2615.90.6090 Free
Ash and Residues Containing Vanadium.... 2620.40.0030 Free
2620.99.1000 Free
Vanadium Sulfate........................ 2833.29.3000 5.5
Vanadium Hydrides, Nitrides, Azides, 2850.00.2000 5.5
Silicides, and Borides.................
[[Page 64770]]
Vanadium, Unwrought and Wrought......... 8112.92.7000 2
8112.99.2000 2
------------------------------------------------------------------------
Source: United States International Trade Commission and U.S. Department
of Commerce, Bureau of Industry and Security, as of December 7, 2020.
* Ferrovanadium products from China, South Africa, and Korea are subject
to additional antidumping duties.
Antidumping duties on ferrovanadium add significantly to the rates
for ferrovanadium from China, South Africa, and Korea (see Figure 14).
Figure 14--Antidumping Duties on Ferrovanadium
------------------------------------------------------------------------
Dumping rate
Country Exporter/producer (percent)
------------------------------------------------------------------------
China........................ Pangang Group 12.97
International Economic &
Trading Corporation.
China-Wide............... 66.71
South Africa................. Highveld Steel and 116.00
Vanadium Corporation,
Ltd.
Xstrata South Africa 116.00
(Proprietary) Limited.
All Others............... 116.00
Korea........................ Korvan Ind. Co., Ltd..... 3.22
Fortune Metallurgical 54.69
Group Co., Ltd.
Woojin Ind. Co., Ltd..... 54.69
All Others............... 3.22
------------------------------------------------------------------------
Source: Federal Register; 68 FR 4168, 68 FR 4169, 82 FR 14874.
In addition to the above general and antidumping duties, China has
been subject to Section 301 duties on all subject vanadium products
except HTSUS 2620.40.0030 (ash and residue containing mainly aluminum
and vanadium-bearing materials) of 10% starting September 21, 2018 and
25% starting August 20, 2019. Prior to the imposition of Section 301
duties, vanadium oxides was the only category of vanadium product with
significant imports from China. Imports of vanadium via vanadium oxides
fell from a monthly average of 31,500 kilograms in the year prior to
the initial announcement of Section 301 tariffs to 7,200 kilograms per
month in year following the imposition of tariffs. Between the initial
announcement of Section 301 duties in April 2018 and the imposition of
duties on vanadium products in September 2018, imports of vanadium
oxides from China rose to 96,000 kilograms of contained vanadium per
month, perhaps due to companies increasing inventories in anticipation
of duties (see Figure 15).
BILLING CODE 3510-33-P
[[Page 64771]]
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BILLING CODE 3510-33-C
VII. Findings
A. Vanadium Is Essential to U.S. National Security
1. Vanadium Is Considered a Critical Mineral
Vanadium is one of the 35 minerals included by the Department of
Interior (DOI) on the Critical Minerals List. This list, which
President Trump directed DOI to define in E.O. 13817, includes minerals
which meet the following criteria:
(i) A non-fuel mineral or mineral material essential to the
economic and national security of the United States,
(ii) the supply chain of which is vulnerable to disruption, and
(iii) that serves an essential function in the manufacturing of a
product, the absence of which would have significant consequences for
our economy or our national security.\103\
---------------------------------------------------------------------------
\103\ White House, ``Presidential Executive Order on a Federal
Strategy to Ensure Secure and Reliable Supplies of Critical
Materials'', (December 20, 2017), <a href="https://trumpwhitehouse.archives.gov/presidential-actions/presidential-executive-order-federal-strategy-ensure-secure-reliable-supplies-critical-minerals/">https://trumpwhitehouse.archives.gov/presidential-actions/presidential-executive-order-federal-strategy-ensure-secure-reliable-supplies-critical-minerals/</a>.
---------------------------------------------------------------------------
In its report, Critical mineral resources of the United States--
Economic and environmental geology and prospects for future supply,
USGS observed that vanadium is used in steel alloys which are in turn
used in critical sectors including bridges, pipelines, ships, rail
cars, truck bodies, and military vehicles, and is ``irreplaceable for
its role in aerospace applications'' via titanium alloys.\104\ For this
reason among others, and based on input from other U.S. government
agencies, USGS included vanadium on the critical minerals list.
---------------------------------------------------------------------------
\104\ Kelley, K.D., Scott, C.T., Polyak, D.E., and Kimball,
B.E., 2017, Vanadium, chap. U of Schulz, K.J., DeYoung, J.H., Jr.,
Seal, R.R., II, and Bradley, DC, eds., Critical mineral resources of
the United States--Economic and environmental geology and prospects
for future supply: U.S. Geological Survey Professional Paper 1802,
p. U1-U36, <a href="https://doi.org/10.3133/pp1802U">https://doi.org/10.3133/pp1802U</a>.
---------------------------------------------------------------------------
As discussed in Section V of this report, in addition to its use in
alloys, vanadium is a vital component in the production of vanadium
redox flow batteries (VRBs), chemical catalysts, ceramics, electronics,
and other vanadium chemicals. VRBs are a potential area of large scale
energy storage, a fast-growing sector that will help support the growth
and reliability of the power grid. As noted above, sulfuric acid's wide
array of manufacturing uses means its production is highly correlated
with industrial development. Though a small percentage of overall
vanadium demand, these catalyst uses are essential for multiple
critical infrastructure and commercial sectors.
USGS cited continued need for steel products as a driver of
vanadium demand, specifically noting expansion of Chinese demand,
increased vanadium content in steel rebar in China and Japan, growing
steel production in India, and expansion of energy uses of vanadium. As
a result, USGS predicts that new sources of vanadium and more efficient
extraction from existing sources will be required to supplement the
current limited supply. Further, as vanadium is required for the
manufacture of titanium products and is a significant alloying agent in
high strength steel, limited vanadium production capacity could create
a supply bottleneck. Such a bottleneck is
[[Page 64772]]
one of the ``vulnerabilities'' identified in E.O. 13817.\105\
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\105\ White House, ``Presidential Executive Order on a Federal
Strategy to Ensure Secure and Reliable Supplies of Critical
Materials''.
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2. Vanadium Is Required for National Defense Systems
Vanadium, as a result of its use in steel and titanium alloys, is a
critical input to many defense systems. The 2017 and 2019 Department of
Commerce Section 232 reports on the effects of steel and of titanium
sponge on national security found that those metals were required for
national defense. Therefore, because vanadium is frequently used in
these metals and there is no suitable substitute for vanadium in many
of these products, vanadium is also required to meet national defense
needs.
DLA has identified [TEXT REDACTED] defense systems that require the
use of vanadium, including but not limited to the [TEXT REDACTED]. The
average titanium content for military airframes that entered service
after 2000 is 30%, implying vanadium content of roughly 1% by
weight.\106\ For example, each F-22A Raptor aircraft contains at least
six separate titanium alloys, some containing as much as 15% vanadium
by weight, with a finished aircraft containing approximately 9,000
pounds of titanium.\107\ Building each aircraft requires significantly
more material: About 50 metric tons of titanium, which in turn requires
approximately 2 metric tons of vanadium content based on a standard Ti-
6Al-4V alloy.\108\ The F-35 Lightning II requires an estimated 15 tons
of titanium per plane to build.\109\ Overall, defense uses account for
an estimated 10% of titanium demand, equivalent to approximately 43
tons of vanadium content per year.\110\
---------------------------------------------------------------------------
\106\ U.S. Department of Commerce. Bureau of Industry and
Security. The Effect of Imports of Titanium Sponge on the National
Security (Washington, DC: 2019) (``Titanium Report'') and based on
use of standard Ti-6Al-4V alloy.
\107\ Cotton, James D. et al. Titanium Alloys on the F-22
Fighter Airframe. Advanced Materials & Processes, May 2002. <a href="https://www.asminternational.org/documents/10192/1756963/amp16005p025.pdf/c0972040-8169-4998-8699-f051fab52d9b/AMP16005P025">https://www.asminternational.org/documents/10192/1756963/amp16005p025.pdf/c0972040-8169-4998-8699-f051fab52d9b/AMP16005P025</a>.
\108\ Seong, Somi et al. Titanium: Industrial Base, Price
Trends, and Technology Initiatives, 2009. <a href="https://www.rand.org/content/dam/rand/pubs/monographs/2009/RAND_MG789.pdf">https://www.rand.org/content/dam/rand/pubs/monographs/2009/RAND_MG789.pdf</a>.
\109\ Ibid.
\110\ Based on average annual 2016-2019 USGS vanadium apparent
consumption of 8,590 tons, titanium uses accounting for 5% of
vanadium consumption, and defense use accounting for 10% of titanium
demand.
---------------------------------------------------------------------------
The Department's 2018 Steel Report aligns with this finding. The
report found that the Department of Defense has ``a large and ongoing
need for a range of steel products that are used in fabricating weapons
and related systems for the nation's defense.'' Among the defense steel
uses cited were aircraft carriers, submarines, and tanks, as well as
the high-strength steel alloys used on aircraft and discussed above.
The Steel Report indicated that Department of Defense's steel
requirements amount to 3% of annual overall U.S. steel production,
equivalent to approximately 230 metric tons of vanadium content per
year.\111\ In addition to direct incorporation of vanadium into defense
systems, the production of these systems relies on vanadium-containing
infrastructure, as tool steels and high speed steels often have a
significantly higher vanadium content than other steel.
---------------------------------------------------------------------------
\111\ Based on average annual 2016-2019 USGS vanadium apparent
consumption of 8,590 tons, steel uses accounting for 90% of vanadium
consumption, and defense use accounting for 3% of steel demand.
---------------------------------------------------------------------------
3. Vanadium Is Required for Critical Infrastructure
As with national defense systems, vanadium is a key component of
much of the steel and titanium used in U.S. critical infrastructure.
Vanadium is a key feature in high-strength, low-alloy (HSLA) steel
products used in the construction industry, including earthquake-
resistant rebar, bridges, and construction cranes. Hand tools and high-
speed steel tools for cutting and boring commonly contain vanadium as a
strengthening agent. The commercial aerospace industry also relies on
vanadium through its use of titanium alloys, and the chemical
production industry uses vanadium directly for production of sulfuric
acid.
The Department's 2018 Steel Report determined that 54 million
metric tons of steel per year were consumed in critical industries,
accounting for half of all domestic steel consumption.\112\ Steel had
uses in all of the United States' 16 critical infrastructure sectors,
with the transportation, energy, and water treatment sectors
specifically noted as vulnerable to disruption. A conservative estimate
of the use of vanadium in critical infrastructure via steel products
amounts to 3,865 tons of vanadium demand annually.\113\
---------------------------------------------------------------------------
\112\ Based on the 16 designated critical infrastructure sectors
identified pursuant to Presidential Policy Directive 21 (PPD-21).
<a href="https://www.cisa.gov/critical-infrastructure-sectors">https://www.cisa.gov/critical-infrastructure-sectors</a>.
\113\ Based on average annual 2016-2019 USGS vanadium apparent
consumption of 8,590 tons, steel uses accounting for 90% of vanadium
consumption, and critical infrastructure use accounting for 50% of
steel demand. Use is likely higher, as critical infrastructure
sectors are more likely to use HSLA and full alloy steels.
---------------------------------------------------------------------------
In the titanium industry, nearly all vanadium-bearing titanium
products have end-uses in critical infrastructure and defense sectors.
Beyond the 10% of titanium consumed via military uses, an estimated 55%
of consumption is in commercial aerospace products--part of the
transportation critical infrastructure sector--with nearly all
remaining consumption in industrial or medical uses. Use of vanadium in
critical infrastructure via titanium products thus amounts to between
236 tons and 365 tons per year.\114\
---------------------------------------------------------------------------
\114\ Based on average annual 2016-2019 USGS vanadium apparent
consumption of 8,590 tons, titanium uses accounting for 5% of
vanadium consumption, and critical infrastructure use accounting for
between 55% and 85% of titanium demand; commercial aerospace
estimated at 55% of titanium demand, but up to 85% of vanadium-
alloyed titanium demand, with industrial and medical titanium
commonly unalloyed.
---------------------------------------------------------------------------
Nearly all non-metallurgical uses of vanadium are also related to
critical infrastructure. The energy sector is a primary destination;
vanadium is used as a catalyst in industrial power plants and as the
electrolyte in vanadium redox flow batteries. The other significant
non-metallurgical use is in the chemical production sector, where
vanadium is used as a catalyst in the production of sulfuric acid and
maleic anhydride. With non-metallurgical use accounting for an
estimated 5% of vanadium demand, direct vanadium use in critical
infrastructure amounts to approximately 430 tons per year.\115\
---------------------------------------------------------------------------
\115\ Based on average annual 2016-2019 USGS vanadium apparent
consumption of 8,590 t.
---------------------------------------------------------------------------
With indirect use in all 16 critical infrastructure sectors, direct
use in the energy and chemical production sectors, and an
``irreplaceable'' status in titanium alloys used in the transportation
sector, vanadium has a key role in U.S. critical infrastructure.
Overall annual critical infrastructure use of vanadium amounts
conservatively to 4,542 tons.
4. Vanadium Has Significant Effects on Other Critical Industries
As discussed above, vanadium has essential uses in steel and
titanium production, and vanadium resources in the United States are
often co-located with uranium. Titanium and uranium have been
identified as critical minerals by the Department of Interior, with
steel, titanium sponge, and uranium all the subjects of recent Section
232 investigations. The impact of the vanadium industry on other
critical industries is significant, underscoring vanadium's status as a
critical commodity.
Following the Section 232 investigation into the effect of imports
[[Page 64773]]
of steel products on national security, on March 8, 2018, the President
issued a proclamation concurring with the Secretary of Commerce's
finding that imports of steel articles threatened to impair U.S.
national security, and imposing a 25% tariff on imports. The goal of
the tariff was to help ensure the economic viability of the domestic
steel industry, which was threatened by low-cost imports. The basis for
the President's actions, and the Secretary's findings, was the critical
role of the steel industry in national security.
As discussed above, the steel industry accounts for approximately
90% of the U.S. demand for vanadium.\116\ Compared to the estimated $92
billion worth of raw steel produced in the United States in 2019,
vanadium costs constituted only a small expense for the overall
industry. However, certain industry sectors incurred far higher cost
exposure to vanadium. In an industry threatened by low-cost imports,
even minor cost changes can have significant effects on domestic
producers. Domestic producers challenged by low-cost imports for more
than one essential ``ingredient'' for their product (e.g., steel and
vanadium) face even more daunting odds.
---------------------------------------------------------------------------
\116\ Equivalent to 7,731 tons contained vanadium, valued at
$297 million based on U.S. Geological Survey Vanadium Mineral
Commodity Summary, apparent consumption and average vanadium
pentoxide prices.
---------------------------------------------------------------------------
Aside from steel, the primary use of vanadium is for use in
titanium alloys. In March 2019, following a petition from Titanium
Metals Corporation (TIMET), the Department of Commerce initiated a
Section 232 investigation into the effect of imports of titanium sponge
on U.S. national security. The Secretary's report found that imports of
titanium sponge and scrap depressed U.S. prices and constituted a
threat to national security, but did not recommend adjustment of
imports, favoring other measures. The President issued a proclamation
on February 27, 2020 concurring with the Secretary's finding.\117\ In
preparing its report, the Department found that an area of particular
concern for the U.S. titanium industry is the advance of Russian and
Chinese producers in aerospace-quality titanium product capabilities.
---------------------------------------------------------------------------
\117\ Memorandum on the Effect of Titanium Sponge Imports on the
National Security. Available at <a href="https://trumpwhitehouse.archives.gov/presidential-actions/memorandum-effect-titanium-sponge-imports-national-security/">https://trumpwhitehouse.archives.gov/presidential-actions/memorandum-effect-titanium-sponge-imports-national-security/</a>.
---------------------------------------------------------------------------
The President's February 2020 proclamation also directed the
formation of a working group to ensure U.S. access to titanium sponge.
Since its formation, the Titanium Sponge Working Group (TSWG) has
explored measures that may help to ensure access to titanium sponge for
U.S. national defense and critical infrastructure purposes. The TWSG,
co-led by the Departments of Commerce and Defense, is considering a
series of recommendations to move toward this goal. [TEXT REDACTED].
Accounting for approximately 5% of domestic vanadium demand, the
U.S. titanium industry consumes an estimated 430 tons of contained
vanadium annually, valued at $17 million.\118\ As noted in above, in a
standard Ti-6Al-4V alloy, vanadium makes up 4% of the weight and
between 12 and 14% of the product cost, making the titanium industry
relatively exposed to vanadium cost changes.
---------------------------------------------------------------------------
\118\ Based on U.S. Geological Survey Vanadium Mineral Commodity
Summary, apparent consumption and average vanadium pentoxide prices.
---------------------------------------------------------------------------
In the United States, primary vanadium production is currently
performed only in conjunction with uranium mining. The only company to
produce mined vanadium in the United States in recent years, Energy
Fuels, was one of the applicants in the Section 232 investigation into
the effect of imports of uranium on national security. The Section 232
report on uranium was completed and sent to the President in April
2019. In his report, the Secretary found that uranium was being
imported in such quantities and under such circumstances as to threaten
to impair national security.
The President's responsive proclamation, issued in July 2019,
expressed concern about domestic uranium supplies and directed the
establishment of a Nuclear Fuel Working Group (NFWG) to carry out a
``comprehensive review of the entire domestic nuclear supply chain.''
\119\
---------------------------------------------------------------------------
\119\ Memorandum on the Effect of Uranium Imports on the
National Security and Establishment of the United States Nuclear
Fuel Working Group. <a href="https://trumpwhitehouse.archives.gov/presidential-actions/memorandum-effect-uranium-imports-national-security-establishment-united-states-nuclear-fuel-working-group/">https://trumpwhitehouse.archives.gov/presidential-actions/memorandum-effect-uranium-imports-national-security-establishment-united-states-nuclear-fuel-working-group/</a>.
---------------------------------------------------------------------------
In April 2020, the Secretary of Energy announced the NFWG's
findings and recommendations in a Strategy to Restore American Nuclear
Energy Leadership. The Strategy recommended ``taking immediate and bold
action to strengthen the uranium mining and conversion industries.''
\120\ The report also cited the inclusion in the President's Fiscal
Year 2021 Budget Request of $150 million for a domestic uranium
reserve. The Fiscal Year 2021 Budget passed by Congress included $75
million for establishment of a uranium reserve.
---------------------------------------------------------------------------
\120\ Department of Energy, Secretary Brouillette Announces The
Nuclear Fuel Working Group's Strategy To Restore American Nuclear
Energy Leadership. April 23, 2020. <a href="https://www.energy.gov/articles/secretary-brouillette-announces-nuclear-fuel-working-groups-strategy-restore-american">https://www.energy.gov/articles/secretary-brouillette-announces-nuclear-fuel-working-groups-strategy-restore-american</a>.
---------------------------------------------------------------------------
As demonstrated by the comments submitted by several companies with
uranium mining resources in response to the Notice of Request for
Public Comments on Section 232 National Security Investigation of
Imports of Vanadium, industry sees a clear connection in the critical
nature of vanadium and uranium. For example, Energy Fuels submitted a
comment supporting a recommendation for Section 232 relief for
vanadium, in part on the basis that there was ``significant
uncertainty'' about a successful outcome for implementation of the
NFWG's recommendations.\121\ Energy Fuels also wrote that vanadium
relief ``together with a reasonable uranium price'' would enable the
company to mine both uranium and vanadium in the future. Another
uranium mining company, Nuvemco, LLC, submitted a comment that included
their submission to the NFWG, based on the adjacency of the two mining
sectors in the United States.
---------------------------------------------------------------------------
\121\ Energy Fuels Resources (USA) Inc. Comment in response to
Notice of Request for Public Comments on Section 232 National
Security Investigation of Imports of Vanadium, July 20, 2020.
<a href="https://www.regulations.gov/document?D=BIS-2020-0002-0016">https://www.regulations.gov/document?D=BIS-2020-0002-0016</a>.
---------------------------------------------------------------------------
B. Imports of Vanadium Have Mixed Effects on the Economic Welfare of
the U.S. Vanadium Industry
1. The U.S. is Presently Reliant on Imports of Vanadium
Though the scope of this investigation covers 12 discrete 10-digit
HTS codes, the bulk of the vanadium imported into the United States
consists of just two products: vanadium pentoxide and ferrovanadium.
The third most frequently imported vanadium product is carbides, a
product sector heavily dominated by South Africa exports of vanadium
carbide nitride, which is used as an alternative to ferrovanadium in
steel production. The remaining vanadium products imported into the
United States that are covered under the scope of this investigation
either constitute niche application areas or are used as inputs or
feedstock in order to produce vanadium products.
[[Page 64774]]
Figure 16--U.S. Imports of Vanadium Products, 2017-2020
[in millions of USD]
----------------------------------------------------------------------------------------------------------------
2020
HTSUS Description 2017 2018 2019 (projected)
----------------------------------------------------------------------------------------------------------------
7202.92.0000...................... Ferrovanadium........... $94.60 $232.65 $167.90 $56.65
2825.30.0010...................... Vanadium pentoxide 60.32 168.95 109.92 36.90
(anhydride).
2849.90.5000...................... Carbides, whether or not 49.38 90.84 98.89 27.57
chemically defined,
nesoi * (excluding of
boron, of chromium, or
of tungsten).
2620.99.1000...................... Ash & residues (except 14.51 63.90 54.48 0.48
from the manufacture of
iron or steel),
containing mainly
vanadium.
8112.99.2000...................... Vanadium and articles 10.75 17.22 17.64 6.08
thereof, wrought, waste
and scrap, powders,
nesoi.
2620.40.0030...................... Ash and residues (other ........... ........... 4.29 9.99
than from the
manufacture of iron or
steel), containing
mainly aluminum,
vanadium-bearing
materials.
2841.90.1000...................... Vanadates, (vanadium 6.24 17.46 3.26 2.04
content).
2615.90.6090...................... Vanadium ores and 0.28 8.45 9.49 0.54
concentrates.
2825.30.0050...................... Vanadium oxides and 3.68 5.45 6.84 3.02
hydroxides, except
vanadium pentoxide,
nesoi.
8112.92.7000...................... Vanadium and articles 2.60 2.21 4.10 0.07
thereof, unwrought,
powders, except waste
and scrap.
2850.00.2000...................... Hydrides, nitrides, 1.08 0.92 0.85 0.65
azides, silicides and
borides, whether or not
chemically defined, of
vanadium.
2833.29.3000...................... Vanadium sulfate........ 0.05 0.12 0.62 0.27
-----------------------------------------------------------------------------
Total......................... ........................ 243.49 608.17 478.28 144.26
----------------------------------------------------------------------------------------------------------------
Source: ITC Dataweb, 2020 data through November.
*nesoi indicates ``not elsewhere specified or indicated.''
Any measurement of the United States' reliance on imports of
vanadium must take into account the wide array of vanadium products and
end uses. U.S. vanadium import reliance varies depending on the type of
vanadium product. Additionally, because some vanadium products are used
to produce other vanadium products, import reliance calculations must
consider domestic capabilities for both the vanadium end products and
their vanadium-bearing feedstocks.
Domestic production capabilities exist for ferrovanadium (50% and
80%), vanadium oxides and hydroxides (including regular grade and high
purity vanadium pentoxide), vanadates, vanadium ore and concentrates,
vanadium master alloys, and vanadium sulfates. The United States does
not currently have domestic capability for vanadium carbides (HTS
2849.90.5000) or vanadium hydrides, sulfides, nitrides, azides,
silicides, and borides (HTS 2850.00.2000), [TEXT REDACTED].\122\ The
United States has very limited capacity to produce vanadium ore and
concentrates, with recent production intermittent and linked to uranium
production.
---------------------------------------------------------------------------
\122\ U.S. Department of Commerce, Bureau of Industry and
Security, Section 232 Investigation into Imports of Vanadium Survey.
---------------------------------------------------------------------------
The following import analysis focuses primarily on ferrovanadium
and vanadium pentoxide, recent import trends for these products and
their feedstocks, and the United States' reliance on imports to satisfy
domestic demand.
Ferrovanadium
Ferrovanadium imports to the United States have fluctuated
significantly in the past decade, generally tracking higher prices with
lower imports, with sources increasingly concentrated in Europe and
Canada (see Figure 17). In 2019, the last year for which full data is
available, the United States imported roughly 2.3 million kilograms of
contained vanadium of ferrovanadium, from Canada (43%), Austria (25%),
Russia (6%) and others (26%). These imports accounted for approximately
[TEXT REDACTED] of total U.S. demand for ferrovanadium in 2019, with
the remaining demand filled by the domestic ferrovanadium producer AMG
Vanadium and converter Bear Metallurgical. Import reliance fluctuated
between [TEXT REDACTED] from 2016 to 2019, averaging roughly [TEXT
REDACTED] over the period.\123\
---------------------------------------------------------------------------
\123\ Data from U.S. Department of Commerce, Bureau of Industry
and Security, Section 232 Investigation into Imports of Vanadium
Survey. U.S. ferrovanadium producers produced and sold enough
material to satisfy an average of [TEXT REDACTED] of apparent
domestic consumption between 2016 and 2019. The U.S. exported an
average of 373,154 kilograms of contained vanadium in ferrovanadium
each year, resulting in domestic production filling approximately
[TEXT REDACTED] of domestic demand.
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BILLING CODE 3510-33-P
[[Page 64775]]
[GRAPHIC] [TIFF OMITTED] TN18NO21.088
BILLING CODE 3510-33-C
While the United States' two domestic producers of ferrovanadium
have produced and sold enough material to satisfy [TEXT REDACTED] of
U.S. demand from 2016 to 2019, the companies' operations require
sourcing vanadium-bearing feedstock in order to produce ferrovanadium.
These U.S. producers convert either vanadium-bearing waste products
(ash, residues, and spent catalysts) or vanadium pentoxide in order to
produce ferrovanadium. Therefore, in order to fully capture the U.S.'s
level of reliance on imports for ferrovanadium, U.S. ferrovanadium
producers' reliance on imported feedstock must be taken into account.
Ash, Residues, and Spent Refinery Catalyst Feedstock for Ferrovanadium
Production
AMG Vanadium, one of the U.S.'s two current producers of
ferrovanadium, produces ferrovanadium by recycling spent refinery
catalysts. Between 2016 and 2019, the [TEXT REDACTED].\124\ In 2019,
U.S. imports of vanadium-bearing waste product were almost exclusively
sourced in Canada, with Mexico as the primary other source since 2010,
[TEXT REDACTED]. (See Figure 18).
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\124\ U.S. Department of Commerce, Bureau of Industry and
Security, Section 232 Investigation into Imports of Vanadium Survey.
---------------------------------------------------------------------------
[[Page 64776]]
[GRAPHIC] [TIFF OMITTED] TN18NO21.089
[TEXT REDACTED].\125\ [TEXT REDACTED]. However, the company's
initiative to double its production capacity (via the opening of a new
facility) means that the company will soon have the ability to [TEXT
REDACTED]. [TEXT REDACTED].\126\
---------------------------------------------------------------------------
\125\ U.S. Department of Commerce, Bureau of Industry and
Security, Section 232 Investigation into Imports of Vanadium Survey.
\126\ Ibid.
---------------------------------------------------------------------------
Vanadium Pentoxide Feedstock for Ferrovanadium Production
Another feedstock source used to produce ferrovanadium is vanadium
pentoxide. Evergreen Metallurgical (dba Bear Metallurgical (Bear))
operates a Pennsylvania facility that converts customer-provided
vanadium pentoxide into ferrovanadium with 80% vanadium content (FeV-
80). Bear does not source its own vanadium pentoxide, but instead acts
as a service provider by toll-producing vanadium pentoxide into FeV-80
for customers. Since the idling of the only U.S. facility that produces
regular grade vanadium pentoxide (less than 99% purity), Bear has been
heavily reliant on imported vanadium pentoxide feedstock from its
customers.\127\ That facility was owned by Bear's parent (Gulf
Chemical) prior to their bankruptcy and the idling and sale of the
facility in 2017 to Gladieux.
---------------------------------------------------------------------------
\127\ Gladieux Metals Recycling (GMR) owns a Freeport, Texas
facility that converted vanadium-bearing waste products (spent
catalysts) into vanadates and vanadium pentoxide (including high
purity vanadium pentoxide). The facility was in operation until 2017
when it was idled and sold to new ownership from previous owners
Gulf Chemical & Metallurgical Corp. Gladieux has not produced and
sold any material since 2017, but is in the process of upgrading the
facility, and plans to restart [TEXT REDACTED] U.S. Vanadium
operates a facility that produces high purity vanadium pentoxide,
typically used in titanium or chemical uses rather than
ferrovanadium production.
---------------------------------------------------------------------------
Therefore, although Bear's conversion of vanadium pentoxide into
ferrovanadium satisfied approximately [TEXT REDACTED] of total U.S.
demand for ferrovanadium between 2016 and 2019, the company [TEXT
REDACTED].\128\
---------------------------------------------------------------------------
\128\ U.S. Department of Commerce, Bureau of Industry and
Security, Section 232 Investigation into Imports of Vanadium Survey.
---------------------------------------------------------------------------
In summary, while domestically-produced ferrovanadium was
sufficient to meet approximately [TEXT REDACTED] of total domestic
demand for ferrovanadium from 2016 to 2019, both domestic ferrovanadium
producers [TEXT REDACTED].
The following section addresses U.S. import trends for vanadium
oxides and hydroxides, including regular grade vanadium pentoxide, high
purity vanadium pentoxide, and other vanadium oxides and hydroxides.
These products are used in Bear's ferrovanadium conversion activities
as well as in the company's production of vanadium products used for
chemical and aerospace applications.
Vanadium Oxides and Hydroxides
Demand for vanadium oxides and hydroxides--driven by vanadium
pentoxide--accounts for close to half of all vanadium demand in the
United States. On average, imports of vanadium pentoxide account for
over 90% of all oxide imports each year.\129\ Since 2010, overall
vanadium oxide and hydroxide imports, including imports of vanadium
pentoxide, have ranged between 2 million and 4.5 million kilograms of
contained vanadium (imports in 2020 are projected to fall below two
million, the lowest level since 2009) (see Figure
[[Page 64777]]
19). Between 2010 and 2015, Russian-sourced oxides and hydroxides were
a major portion of U.S. imports, accounting for nearly 35% of imports,
but were largely replaced by growing imports from Brazil and South
Africa beginning in 2016.
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\129\ ITC Dataweb.
[GRAPHIC] [TIFF OMITTED] TN18NO21.090
BILLING CODE 3510-33-C
Russian ferrovanadium, which had been absent from the U.S. market
from 1997, returned to U.S. markets in 2014 following the October 2011
revocation of the antidumping order. Imports of Russian vanadium oxides
have been largely replaced by imports of Russian ferrovanadium, though
not at levels approaching the 2010 to 2014 period.
Vanadium oxides and hydroxides cover a range of vanadium products
with different application areas. A nuanced measurement of the U.S.'s
import reliance for this category of goods must take into account each
type of product with the category, including regular grade vanadium
pentoxide, high purity vanadium pentoxide, and other oxides and
hydroxides.
Vanadium Pentoxide
Vanadium pentoxide can generally be divided into high purity
(suitable for use in the chemical and titanium industries) and regular
purity (more commonly converted to ferrovanadium for use in the steel
industry). No domestic producers are currently producing regular purity
vanadium pentoxide, though Gladieux is planning to restart production
[TEXT REDACTED]. With Gladieux's facility idled since 2016, the U.S.
has been close to 100% reliant on imports for regular grade vanadium
pentoxide. U.S. Vanadium is the primary domestic producer of high
purity vanadium pentoxide; Energy Fuels also provided small amounts in
2019.
Much of the regular purity vanadium pentoxide in the United States
is converted into FeV-80 at Bear's Pennsylvania facility. With annual
vanadium pentoxide imports from 2016 to 2019 averaging 3.8 million
kilograms of vanadium content, and the company processing regular
purity vanadium an annual average of [TEXT REDACTED] of vanadium
content during this period, at least [TEXT REDACTED] of vanadium
pentoxide imports were provided to Bear for conversion into
ferrovanadium.\130\
---------------------------------------------------------------------------
\130\ U.S. Department of Commerce, Bureau of Industry and
Security, Section 232 Investigation into Imports of Vanadium Survey.
---------------------------------------------------------------------------
U.S. import reliance on vanadium pentoxide has risen significantly,
from 55% in 2016 to 87% in 2017 and to close to 100% in 2018, due in
part to the sole domestic producer of regular purity vanadium pentoxide
(the Gulf/Gladieux facility in Freeport, Texas) idling operations in
order to modernize the facility. The other major producer of vanadium
pentoxide--the Hot Springs, Arkansas facility operated by EVRAZ
Stratcor until its sale to U.S. Vanadium in 2019, which produces high
purity vanadium pentoxide--has reportedly had a history of feedstock
supply difficulties leading to production difficulties, which were
exacerbated in 2017 following sanctions prohibiting
[[Page 64778]]
imports from Venezuela.\131\ As a primary producer of vanadium, Energy
Fuels is the only domestic entity entirely independent of foreign
sources for generating vanadium pentoxide.
---------------------------------------------------------------------------
\131\ Bushveld Minerals Limited. Comment in response to Notice
of Request for Public Comments on Section 232 National Security
Investigation of Imports of Vanadium, July 20, 2020. <a href="https://www.regulations.gov/document?D=BIS-2020-0002-0013">https://www.regulations.gov/document?D=BIS-2020-0002-0013</a>.
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Energy Fuels has moderate vanadium pentoxide production capacity,
producing high purity vanadium pentoxide containing 460,000 kilograms
of vanadium in 2019, of which only a small portion was sold
(approximately 410,000 kilograms was unsold and remained in the
company's inventory). However, should vanadium prices rise, Energy
Fuels has the capability to restart vanadium mining operations, with
the capacity to produce [TEXT REDACTED].\132\ With Gladieux planning to
resume operations and U.S. Vanadium increasing production levels of
high purity vanadium pentoxide [TEXT REDACTED], direct U.S. import
reliance for vanadium pentoxide will likely decrease in the future.
[TEXT REDACTED] \133\
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\132\ U.S. Department of Commerce, Bureau of Industry and
Security, Section 232 Investigation into Imports of Vanadium Survey.
\133\ Ibid.
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However, because U.S. secondary producers are reliant on imports of
vanadium-bearing wastes for most of their feedstock, the United States
will likely continue to be dependent on foreign sources of vanadium to
meet domestic demand for vanadium pentoxide.
Other Vanadium Products
While ferrovanadium and vanadium oxide products are the most
heavily traded vanadium products, the United States is also reliant on
imports for other vanadium products including vanadates, vanadium
carbides, vanadium sulfates, and vanadium hydrides, sulfides, nitrides,
azides, silicides, and borides.
Of these products, the United States has production capacity for
only vanadium sulfate and vanadate production, and is completely import
reliant for vanadium carbides and vanadium hydrides, sulfides,
nitrides, azides, silicides, and borides.\134\ Of these products,
vanadium carbides comprised the largest share of trade by a significant
margin during the period of study. Imports of vanadium carbides
averaged $67 million annually from 2016 to 2019, while the imports of
vanadium sulfate, vanadates, and vanadium hydrides, sulfides, nitrides,
azides, silicides, and borides combined averaged $9 million annually
during the same time period.\135\
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\134\ U.S. Department of Commerce, Bureau of Industry and
Security, Section 232 Investigation into Imports of Vanadium Survey.
\135\ ITC Dataweb.
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Imports of vanadium carbides, relatively stable since 2010, have
come overwhelmingly from South Africa (see Figure 20). The most
commonly imported carbide product is in the form of nitrided vanadium
carbide sold as Nitrovan[supreg]. As noted in the USITC's 2012
antidumping report for the third sunset review on imports of
ferrovanadium and nitrided vanadium from Russia, the U.S. has not
produced nitrided vanadium since 1992.\136\
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\136\ U.S. International Trade Commission. Ferrovanadium and
Nitrided Vanadium from Russia. Investigation No. 731-TA-702, (Third
Review). <a href="https://www.usitc.gov/publications/701_731/pub4345.pdf">https://www.usitc.gov/publications/701_731/pub4345.pdf</a>.
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BILLING CODE 3510-33-P
[[Page 64779]]
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In summary, understanding the overall U.S. import reliance on
vanadium must take into account the structure of the vanadium supply
chain, including the original feedstock of the vanadium products. [TEXT
REDACTED]. The United States has no producers of vanadium carbides, nor
of vanadium hydrides, nitrides, azides, silicides, and borides. For the
balance of vanadium products the United States is not directly import
reliant, but to the extent that it is reliant on imports of vanadium
feedstock and vanadium pentoxide, it is because these products depend
on non-U.S. origin inputs.
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2. U.S. Reliance on Imports of Vanadium Is Not Increasing
Imports of contained vanadium to the United States have not
increased since 2014 and have decreased moderately since that time (see
Figure 22). Even before the 2020 plunge in imports (driven by COVID-19-
related demand declines), overall contained vanadium imports in 2019
were 4% below the 2010-2019 average.
[GRAPHIC] [TIFF OMITTED] TN18NO21.092
BILLING CODE 3510-33-C
Further, import reliance is not likely to increase. Major U.S.
producers of ferrovanadium and vanadium pentoxide are in the process of
expanding or restarting operations. U.S. capacity for ferrovanadium
production from vanadium-bearing waste will more than double in 2021
with the opening of AMG Vanadium's new facility; the production
increase will exceed annual average imports of ferrovanadium. U.S.
capacity for vanadium pentoxide production from vanadium-bearing waste
will also [TEXT REDACTED].
However, despite these upcoming significant increases in vanadium
pentoxide and ferrovanadium production capacity, the United States will
remain heavily reliant on foreign sources of vanadium, as significant
quantities of the feedstock that U.S. producers use are sourced from
outside the country. Mitigating factors on this reliance include that
[TEXT REDACTED].\137\
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\137\ U.S. Department of Commerce, Bureau of Industry and
Security, Section 232 Investigation into Imports of Vanadium Survey.
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In addition, several mining companies with locations in the United
States have idle production capacity, significant inventory, and/or are
exploring the development of vanadium mines. For example, Energy Fuels
retains 410,000 kilograms of vanadium in inventory from 2019
production, and has
[[Page 64781]]
indicated the ability to produce [TEXT REDACTED].\138\ The Gibellini
project in Carlin, Nevada expects to receive permits in 2021 and begin
production in 2023, with an annual production forecast of 2.4 million
kilograms of vanadium content per year.\139\ Should both of these
producers achieve their full capacity, their production would equal
[TEXT REDACTED] of vanadium content per year, or [TEXT REDACTED] of
annual domestic demand from 2016 to 2019. An increase in the
availability of domestic primary vanadium, expansion of secondary
production, and the addition of domestic feedstock for secondary
production would mitigate current high reliance on imports.
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\138\ Ibid.
\139\ Silver Elephant Mining Corporate Presentation: Gibellini
Vanadium, <a href="https://www.silverelephantmining.com/projects/gibellini-vanadium/">https://www.silverelephantmining.com/projects/gibellini-vanadium/</a>.
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3. Prices
Vanadium prices have a long history of volatility, with resulting
impacts on the availability of vanadium resources and the viability of
vanadium producers, as well as patterns of investment. The benchmark
vanadium pentoxide price has more than doubled in short spans three
times since 2004, most notably rising from $7 per pound in September
2004 to nearly $35 per pound in May 2005 before falling to $10 per
pound by June 2006.
Such cycles may be more the standard than an anomaly in the
vanadium industry. In 1977, the primary U.S. producer of vanadium
oxide--Union Carbide--cut its production due to low prices and, in
1978, announced the idling of its Arkansas mine and mill.\140\ Less
than a decade later, in 1985, the U.S. Bureau of Mines wrote that the
domestic vanadium industry was in the midst of a ``major restructuring
. . . triggered by (1) the sharp decline in ferrovanadium consumption
by U.S. steel producers during the 1982-83 recession, and (2)
continuing depressed prices for co-product uranium oxide.'' \141\ Just
four years later, they reported:
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\140\ Bureau of Mines Minerals Yearbook, Vanadium 1977.
\141\ Bureau of Mines Minerals Yearbook, Vanadium 1985.
The year 1988 proved to be a boom year for vanadium producers as
tight supply and strong demand by the steel industry and other
consumers pushed up the price of vanadium compounds. . . . By the
end of 1989, vanadium's fortunes had turned full circle as the
market witnessed prices headed for levels lower than at any time
since the early 1980s.\142\
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\142\ Bureau of Mines Minerals Yearbook, Vanadium 1989.
Price-related closures and investments have continued. The
Australian Windimurra mine, for instance, closed as the result of low
prices in 2003 only to be purchased by a new company when prices spiked
in 2005. After an investment of more than $100 million, prices fell and
the mine was not reopened.\143\ In the United States, during the latest
price spike, AMG Vanadium announced the approval for construction of
its new facility (in October 2018); \144\ the owners of the Gibellini
property completed its Preliminary Economic Assessment (PEA) (in May
2018); and First Vanadium carried out its maiden mineral resource
classification (in February 2019).
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\143\ McKinnon, Stuart. Vanadium Price Boom Offers Hope of
WIndimurra Revival. The West Australian, April 2, 2018. Available at
<a href="https://thewest.com.au/business/mining/vanadium-price-boom-offers-hope-of-windimurra-revival-ng-b88792684z">https://thewest.com.au/business/mining/vanadium-price-boom-offers-hope-of-windimurra-revival-ng-b88792684z</a>.
\144\ AMG ADVANCED METALLURGICAL GROUP N.V. COMPLETES
FEASIBILITY STUDY TO EXPAND SPENT CATALYST PROCESSING CAPACITY.
<a href="https://amg-v.com/oct-16-18-news/">https://amg-v.com/oct-16-18-news/</a>.
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The introduction of new capacity is tied to vanadium prices, as
extraction that is not viable at $6 per pound vanadium pentoxide can
become profitable at $12 per pound. First Vanadium's PEA assumes a
vanadium pentoxide price of $10.65 per pound, well above current
prices, and a cost of production of $5.17 per pound.\145\ Only [TEXT
REDACTED] U.S. producers of vanadium pentoxide or vanadium ore indicate
the ability to produce at current prices, though the number of
producers rises [TEXT REDACTED] once prices increase to $10 per pound
of vanadium pentoxide and [TEXT REDACTED] at $13 per pound.\146\ This
is consistent with the world cost curve, which shows most currently
viable production operates below a cost of $8 per pound (see Figure
23).
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\145\ First Vanadium Announces Positive Preliminary Economic
Assessment for the Carlin Vanadium Project in Nevada <a href="https://www.firstvanadium.com/index.php/news/2020/548-irstanadiumnnouncesositivereliminaryconomicsse20200511">https://www.firstvanadium.com/index.php/news/2020/548-irstanadiumnnouncesositivereliminaryconomicsse20200511</a>).
\146\ U.S. Department of Commerce, Bureau of Industry and
Security, Section 232 Investigation into Imports of Vanadium Survey.
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BILLING CODE 3510-33-P
[[Page 64782]]
[GRAPHIC] [TIFF OMITTED] TN18NO21.093
4. Employment
Although never a major employer, aggregate employment in the U.S.
vanadium industry has waxed and waned during the last decade. The
sector currently employs more people than it has during that time
period, however, this current increase has not been shared equally
across industry participants. While some producers have added
employees, others have not.
Employment levels among vanadium producers were most notably
affected by the 2017 idling and ongoing refurbishment of Gladieux's
Texas facility. The facility's closure caused aggregate industry
employment to drop sharply in 2017 but the numbers rebounded sharply in
2018 (see Figure 24).
[GRAPHIC] [TIFF OMITTED] TN18NO21.094
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BILLING CODE 3510-33-C
[TEXT REDACTED]
Most U.S. producers of vanadium products indicate that the
volatility of vanadium prices make it difficult to recruit and retain
employees. [TEXT REDACTED]
5. Financial Outlook
The U.S. vanadium production industry is small and in the midst of
significant restructuring, making the industry's overall financial
outlook difficult to characterize. However, it is clear that the
industry has been significantly impacted by rapid changes in vanadium
prices, particularly the collapse in price in 2019 from a high of
approximately $30 per pound of vanadium pentoxide in November 2018 to
less than $7 per pound by the end of 2019 and by the ongoing impacts of
COVID-19 on the steel and titanium industries.
[TEXT REDACTED]
[TEXT REDACTED] \147\
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\147\ AMG Annual General Meeting Minutes (May 1, 2019), as
provided in public comments by Bushveld Minerals Limited, available
at <a href="https://www.regulations.gov/document?D=BIS-2020-0002-0013">https://www.regulations.gov/document?D=BIS-2020-0002-0013</a>.
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Given its acquisition of EVRAZ Stratcor's Arkansas facility in
October 2019, it is difficult to fully assess the financial health of
U.S. Vanadium, as the facility's business practices are in transition.
[TEXT REDACTED]
[TEXT REDACTED]
The facility of the remaining U.S. secondary producer, Gladieux,
remains idle as the company completes the extensive modernization
started after Gladieux purchased the facility from Gulf Chemical in
2017. [TEXT REDACTED]
[TEXT REDACTED]
The only other company that has produced vanadium production since
2016 is Energy Fuels Resources, whose primary business line is uranium
mining. [TEXT REDACTED]
[TEXT REDACTED]
6. Exploration
In addition to Energy Fuels' primary production capacity, several
other companies have properties that have mined vanadium in the past or
are now under exploration. However, future profitable production at any
of these properties is dependent upon an increase in the price of
vanadium.
Western Uranium & Vanadium [TEXT REDACTED].\148\
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\148\ U.S. Department of Commerce, Bureau of Industry and
Security, Section 232 Investigation into Imports of Vanadium Survey.
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Nuvemco, LLC owns the Last Chance Mine in Colorado, which has been
idle since 2009 but the company says can return to operations within
120 days.\149\ [TEXT REDACTED]
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\149\ <a href="http://www.nuvemco.com/Projects.html">http://www.nuvemco.com/Projects.html</a>.
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Two additional projects are under development: First Vanadium
Corporation's Carlin Vanadium Project and Nevada Vanadium LLC's (Nevada
Vanadium) Gibellini Vanadium Project. The Gibellini project is in the
permitting process, with BLM expected to reach a decision by August
2021.\150\ Nevada Vanadium plans to begin production in late 2023,
producing vanadium pentoxide with 33 million kilograms of vanadium
content over 14 years.\151\ [TEXT REDACTED]
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\150\ Bureau of Land Management Accepting Comments for Gibellini
Mine, August 17, 2020. Available at <a href="https://www.blm.gov/press-release/bureau-land-management-accepting-comments-gibellini-mine">https://www.blm.gov/press-release/bureau-land-management-accepting-comments-gibellini-mine</a>.
\151\ Silver Elephant Mining Corporate Prese
[…truncated; see source link]Indexed from Federal Register on November 18, 2021.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.