- MOU signed with ATCO for supply of green hydrogen.
- Introduction of 10% green hydrogen to the gas pipeline for vanadium processing.
- Potential for reduced carbon emissions for the Australian Vanadium Project.
- Other areas of mutual interest will also be explored.
Australian Vanadium Limited (ASX: AVL, “the Company” or “AVL”) is pleased to advise that it has signed an MOU with ATCO Australia for the supply of green hydrogen for AVL’s planned processing plant which is to be located near Geraldton. ATCO is one of seven proponents shortlisted by the Australian Renewable Energy Agency (ARENA) under the Renewable Hydrogen Deployment Round to develop a project for the commercial scale production of hydrogen gas in Australia.
The MOU provides a basis for negotiations to establish a binding offtake agreement, with the intention for ATCO to supply 10% of the total gas requirements with green hydrogen.
Managing Director Vincent Algar comments, “As we progress the Australian Vanadium Project towards production, our social and environmental approach becomes of increasing importance to stakeholders and investors. Working with a company of ATCO’s calibre will enable AVL to use green hydrogen in the natural gas supply, thereby reducing our carbon footprint. We are excited to be part of creating local industrial consumption markets for an emerging hydrogen industry in Western Australia.”
ATCO’s Managing Director, Australia, Pat Creaghan, said “Green hydrogen represents a great opportunity for Western Australia, and certainly has a role to play in the future energy mix globally. We’re pleased to be working with AVL to assist them to decarbonise their business.”
AVL recently launched its green hydrogen strategy1, with a range of opportunities that offer the potential to reduce carbon emissions for the Australian Vanadium Project (“Project”).
The proposed Project includes open pit mining, crushing, milling and beneficiation at AVL’s site located approximately 40km south-east of Meekatharra and 740km north-east of Perth and a processing plant for final conversion to high-quality vanadium pentoxide for use in steel, specialty alloys and battery markets, which is to be located at Tenindewa, between Mullewa and Geraldton.
The MOU is for a period of 2 years and is non-binding. The supply period is for an initial 10 years, with the option to renew for a further term of 10 years. Any binding agreement will be subject to due diligence and conditional upon both ATCO’s development of its proposed hydrogen production facility and the Project’s positive final investment decision. The minimum quantity of green hydrogen will be agreed and will be contracted on a Take-or-Pay arrangement. Pricing is to be confirmed, with pricing intended to be based on 2020 figures and with an annual escalation with reference to the consumer price index. Under the terms of the MOU, either party may terminate the agreement for any reason by giving no less than 30 days written notice.
ATCO and AVL also wish to explore other opportunities with mutual benefit within the parties’ expertise.
AVL’s intention is to explore the use of green hydrogen for both vanadium processing and transportation, with the economic parameters a key driver in any decision making.
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