Ivanhoe Electric’s (NYSE American: IE) (TSX: IE) cleantech subsidiary VRB Energy has entered into a joint venture with a Chinese investment firm to help scale up the production of its VRB-ESS vanadium redox flow battery systems, as well as set up a new US-based manufacturing site.
As outlined in the JV framework, Shanxi Red Sun Co., the investment firm, will establish two manufacturing sites in China, one Shanxi province and a second in Hunan province, each with a 300-megawatt and a 200-megawatt production line respectively.
VRB estimates that these production lines combined will provide approximately 10 times the production capacity of its existing facility. The batteries will be sold mainly to the Asia, Middle East and Africa markets.
Furthermore, the JV will also construct a dedicated electrolyte plant with Red Sun’s funding. This facility, to be located in Shanxi province, is expected to be completed in 2025 and have a production capacity of 5,000 cubic metres of electrolyte per year.
“Red Sun’s support and investment allows us to scale production, drive innovation, and deliver impactful solutions to meet market demand while shaping the future of energy storage,” said Charles Ge, chief executive officer of VRB Energy, which is 90% owned by Ivanhoe Electric.
Under the agreement, Red Sun will purchase shares of the JV from VRB for $20 million cash, and also complete a capital increase of $35 million through 2025 by issuing new shares, for a total investment of $55 million. Upon closing, Red Sun and VRB would each hold 51% and 49% of the JV.
In addition to the formation of the JV, Ivanhoe Electric and VRB will also establish a separate US-based vanadium redox battery business, to be located in Arizona, after restructuring VRB’s intellectual property and transferring its US patents from the JV back to VRB. According to Ivanhoe, the Arizona facility will be capable of producing 50 megawatts per year of VRB-ESS batteries.
The new US business, which will use the JV as a preferred supplier for certain key equipment and electrolyte, will be 100% owned by VRB and receive the initial $20 million investment from Red Sun.
“Today’s announcement is a significant milestone for our VRB Energy subsidiary and Ivanhoe Electric’s establishment of a US-based vanadium redox battery business in Arizona, supported by $20 million from the announced transaction,” stated Ivanhoe Electric’s CEO Taylor Melvin.
The transaction, according to Ivanhoe, is expected to close in the fourth quarter of this year.
Source: MINING.COM – Read More
