Vanadium Recovery Upended: QEM’s Julia Creek Scoping Study No Longer Reliable

Metallurgical Test Work Upends Project Assumptions

QEM Limited (ASX – QEM) has delivered a sobering update on its flagship Julia Creek Vanadium and Energy Project in Queensland. Recent metallurgical test work conducted by the University of Queensland has challenged fundamental assumptions underpinning the company’s 2024 Scoping Study. Most notably, the strategy of extracting vanadium through direct kerogen recovery by flotation has been found to be technically and economically unviable.

This revelation disrupts the previously optimistic outlook for the project, which had envisaged kerogen flotation as a key pathway to unlock vanadium from the oil shale deposit. Instead, the test results indicate that vanadium is preferentially recovered in the calcite concentrate rather than the kerogen-rich tailings, overturning the hypothesis that vanadium is primarily associated with kerogen.

Complex Mineralogy Adds Processing Challenges

The Julia Creek deposit’s mineralogy is more complex than initially understood. The presence of fossilised microorganisms, such as coccoliths within the calcium carbonate matrix, complicates conventional flotation processing. These biogenic carbonates differ in texture and chemistry from crystalline calcite, affecting mineral liberation and vanadium deportment. The company acknowledges that further detailed mineralogical analysis and flowsheet optimisation are necessary before advancing additional metallurgical testing.

Complementary test work by Core Resources on coquina materials above the oil shales confirmed that vanadium distribution is uniform across particle sizes, ruling out simpler beneficiation methods like scrubbing-cycloning. Instead, a more energy-intensive crushing-grinding-flotation process will be required, adding to processing complexity and costs.

Strategic Review Amid Market Headwinds

In response to these technical setbacks and the current depressed vanadium price environment, QEM has initiated a strategic review of the Julia Creek Project. The review aims to preserve capital by slowing development activities and reassessing all project and corporate opportunities. Despite the challenges, QEM will continue environmental baseline monitoring necessary for its Environmental Impact Statement and maintain momentum on renewable energy initiatives with partner Potentia Energy.

Managing Director Robert Cooper expressed disappointment but framed the review as an opportunity to explore future avenues. Chairman Tim Wall echoed this cautious optimism, emphasizing the importance of the ongoing review to validate assumptions and guide the project’s next steps.

Looking Ahead

QEM’s Julia Creek Project remains one of the largest vanadium and oil shale resources listed on the ASX, with a JORC-compliant mineral resource of 2.87 billion tonnes at 0.31% V2O5. However, the recent test work results underscore the technical and economic challenges inherent in unlocking value from such complex deposits. The company’s forthcoming strategic review and further metallurgical investigations will be critical in determining whether and how the project can be advanced in a challenging market.