Vanadium producer Largo undertaking ‘strategic review’ of downstream venture

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Vanadium product manufacturer Largo Inc has appointed financial advisors to undertake a “strategic review” of its downstream energy storage deployment arm Largo Clean Energy.

The company’s board has: “initiated a review and evaluation of strategic alternatives with the intent to unlock and fully maximize the value of Largo Clean Energy Corp (LCE),” it announced yesterday (29 August).

Largo said the process will include: “a range of strategic, business, and financial alternatives, including, but not limited to, evaluating and completing financing transactions at the LCE subsidiary level, mergers and acquisitions of LCE with other battery companies and partnership opportunities with well-established energy system producers who are interested in entering the vanadium battery sector with the unique elements that Largo offers to this industry.”

The company has appointed Gallatin Capital to advise on securities transactions and Castle Grove Capital to advise on the strategic review and evaluation process.

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A strategic review of a unit by a listed firm can often mean that the firm is considering selling off the unit entirely.

Largo formed LCE in 2020 as a vertically-integrated energy storage solution provider with the acquisition of 12 patent families from VionX Energy Corp and invested US$150 million in its vanadium redox flow battery (VRFB) technology. However, news on projects has been scarce since it received an order from global utility Enel for a 1.22MW/6.1MWh VRFB in Spain in 2021.

Bushveld Minerals, another vanadium producer and the second of three vanadium majors along with mining giant Glencore, has launched a downstream arm with the acquisition of a stake in Austria-based VRFB provider CellCube. It has recently been undertaking a series of complicated transactions to restructure CellCube into a separate listed SPAC company.

VRFB technology is among the more commercially mature alternative battery technologies to lithium-ion, today’s technology of choice for the vast majority of energy storage projects.

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