Bahia will produce 8% of the global vanadium supply.

Bahia 247

Bahia will host one of the world's largest vanadium mining operations later this year. The Canadian company Largo Resources and the state government laid the foundation stone yesterday in Maracás (BA). The mine will be the first in the Americas and will be responsible for 8% of global production of the metal – and at the lowest cost in the world, according to the company.

Resistant to shocks and corrosion, vanadium is used to give steel alloys more strength. It is used, for example, in the military, aeronautical, and aerospace industries, in civil construction, in the production of stainless steel for surgical instruments and tools, and in a range of smaller products, such as lighters.

The first kilograms of metal from Vanádio de Maracás, a subsidiary of Largo Resources and owner of the project, will be produced in the last quarter of this year, according to Mark Brennan, president of the Canadian company. The company has already obtained most of the necessary licenses to produce and is in the final stages of construction, in the electrical installation and equipment assembly phase.

The investment will total US$275 million, with US$175 million from BNDES, guaranteed by Itaú, Bradesco, and Votorantim banks. This amount includes the purchase of the project in 2007 from Odebrecht and Vale, which at the time had estimated mineral reserves at 10 million tons. Subsequent studies identified Vanádio de Maracás as having a volume of 23 million tons, giving the mine a lifespan of 29 years.

"Now, we no longer need resources, we just need to finish the construction," the executive said in an interview with Valor Econômico. He states that the unit will generate annual revenue of at least US$120 million starting next year. This year, US$35 million will be spent.

Governor Jaques Wagner celebrated the partnership. "It is actions like this, attracting investments, that have made it possible in six years to generate more than 200 formal jobs, and most importantly, 62% of these jobs were in the interior of the state, in areas such as agribusiness, support for small industries, services, mining, among others."

The high vanadium content in Maracás – 1,34%, compared to 0,5% in some of the world's leading mines – should guarantee high margins for the company, says Brennan. According to Mark, the cost per kilogram of vanadium from the project was estimated at US$12, while the market price is US$32. Vanadium pentoxide, which will be the company's first product and has the same uses as ferrovanadium alloys, will cost US$2,10 per pound, while the market price is around US$7 per pound.