from The Gold's Report March 19th interview with Jon Hykawy...

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TGR: Are there any supply issues related to this metal (vanadium)?

JH: Sadly there are and that's been an unfortunate aspect that may well contribute to curtailing its use in batteries.

We've seen the price of vanadium over the last two years fluctuate between currents level of $25 or $30 and as high as $80 or $85 per kilogram. You can't have a material that you're using in significant quantities in a battery vary by that kind of amount and expect to build a business off of it.

I can give you some concrete numbers in that regard.

If you look at something like the Nissan Leaf and the battery that would go into driving a Leaf, that's a 24 kilowatt hour battery. This is very significant capacity in terms of energy storage. It would use roughly 20 to 25 kilograms worth of lithium carbonate equivalent. Lithium carbonate today sells for about $5,000 a ton. So you're looking at about $100 to about $125 worth of raw lithium going into that battery. The battery will sell for $10,000, a fairly insignificant amount. Were that battery to be constructed using lithium vanadium phosphate chemistry, it would contain several thousand dollars worth of vanadium. If it were to suddenly triple in price it might go from $2,000 worth of vanadium to $6,000 or $7,000 worth of vanadium. Suddenly the manufacturer of that battery doesn't see any margin on any sale. In fact they might be selling those batteries at a loss.

No one's going to risk a long-term contract on those batteries. If there's no long-term contract the automotive manufacturers certainly aren't going to use it. What you need to really satisfy the requirement for stable pricing is additional supplies in the market.