Melbourne (Platts)--21Nov2012/427 am EST/927 GMT

Australian vanadium producer Atlantic's wholly-owned subsidiary Midwest Vanadium has earmarked an additional $9.9 million from cash reserves and a potential $10 million in further reserves to support the rampup of production at its Windimurra plant in the state of Western Australia, which is currently behind schedule, a company official said Wednesday.

Windimurra produced first ferrovanadium in January after a delay from the original schedule of late 2011 due to commissioning issues. It had been due to reach full production capacity of 6,300 mt/year by December, which has since been pushed back to end June 2013.

Its full capacity equates to about 8% of global supply.

Article continues below...

Sign up to Metals Daily
	Platts Metals Daily offers prices, news and analysis for the aluminum, copper and molybdenum value chains. It contains hundreds of metals prices across base, minor, light and precious metals assessed by editors globally. This detailed report will help you monitor global events and quickly spot opportunities or potential pitfalls as well as bring you aluminum and copper price and news coverage. Daily prices and news for molybdenum are also covered to deliver critical insights.

Modification works were undertaken at the plant in the September quarter, during which Windimurra produced only 36 mt of ferrovanadium. The company is targeting output of between 867 mt and 1,060 mt in the first quarter of 2013.

All output is delivered to a warehouse in Perth, located approximately 600 km to the south, for sale into the US in accordance with the terms of Atlantic's sales and marketing agreement with China's Wengfu Group and Hong Kong-based Element Commodities, which covers 100% of Atlantic's ferrovanadium production.

The release of the funds follows an independent technical consultant's report conducted as part of a review of the Windimurra project that confirmed there were no serious flaws. However it identified throughput constraints that are currently being addressed by Atlantic.

"There has been tremendous progress made at Windimurra in what has been a difficult period and we remain focused on significantly increasing vanadium production in the coming months," Atlantic's managing director Michael Minosora said.

Windimurra will also produce 1 million mt/year of iron ore fines, for which Atlantic continues to engage with potential customers. However the current iron ore market does not provide favorable conditions for committing to a long-term contract, Minosora said. --Marnie Hobson, marnie_hobson@platts.com --Edited by Wendy Wells, wendy_wells@platts.com

Tweet