Vanadium Resources Limited (ASX:VR8) has reached an in-principle understanding with China Energy International Group Co. Limited (CEIG) to exclusively negotiate the supply of Engineering, Procurement & Construction services and assistance for Financing (EPC-F) for the development of the Steelpoortdrift Project in South Africa. The partly binding Memorandum of Understanding (MOU) formalizes the mutual intention for both CEIG and VR8 to exclusively investigate and negotiate the Services, potentially transforming the Company into a vertically integrated vanadium producer.
Mr. John Ciganek, Chief Executive Officer of VR8, expressed his delight at the partnership, highlighting CEIG's expertise in engineering, construction, and renewable energy, which aligns well with the Project's objectives. He emphasized the potential longer-term relationship leveraging substantial vanadium resources and renewable energy expertise. Mr. Jurie Wessels, Executive Chairman of VR8, also expressed satisfaction with the partnership, emphasizing the opportunity to combine CEIG's service excellence with the Project's vanadium resource and the potential to allocate 100% of the Project's output to the renewable energy sector.
The MOU between Vanadium Resources and CEIG marks a significant step towards potential transformation into a vertically integrated vanadium producer with a strategic focus on renewable energy initiatives. The partnership aims to leverage CEIG's expertise to support the Company's objective of becoming a vertically integrated business, including vanadium electrolyte production, VFB's, and renewable energy generation. The MOU also presents the potential for a strategic partial decoupling from the steel sector, with the possibility of allocating up to 100% of Steelpoortdrift's output to renewable energy initiatives. The Company's ambitions to strengthen renewable energy initiatives and potentially enter higher growth and higher-margin markets are expected to be positively impacted by this collaboration.