€48.7M Finnish Grant Advances Neometals’ €400M Vanadium Recovery Project

A Major Boost for Europe’s Vanadium Supply

Neometals Ltd (ASX, NMT) has taken a significant step forward in its strategic push into critical minerals with its Finnish subsidiary Novana Oy securing a €48.7 million (approximately AUD 86.8 million) conditional grant from Business Finland. This funding is earmarked to support the development of the Vanadium Recovery Project (VRP1) in Pori, Finland, a project poised to become Europe’s first carbon-neutral vanadium production facility.

Vanadium is a critical mineral essential for steel manufacturing and emerging battery technologies, yet Europe currently imports nearly all its supply, primarily from China and Russia. The Pori plant is expected to produce around 9,000 tonnes of vanadium annually, which would satisfy up to 60% of Europe’s vanadium needs, marking a strategic leap towards regional self-sufficiency.

Innovative Circular Economy and Environmental Credentials

The project’s uniqueness lies in its use of patented recycling technology developed by Neometals, which extracts vanadium from industrial side streams. This approach not only reduces reliance on traditional mining but also boasts a low-to-negative carbon footprint, aligning with Europe’s green transition goals. The plant will also generate by-products used in construction materials, reinforcing the circular economy model.

Novana has already secured all necessary environmental permits and a long-term lease for the plant site in Tahkoluoto, Pori. Additionally, a binding offtake agreement with global commodities giant Glencore International AG ensures that 100% of the vanadium produced will have a committed buyer, providing revenue certainty once production commences.

Financing and Ownership Outlook

The €48.7 million grant significantly reduces the equity component required for the project’s estimated €400 million capital investment. Novana is actively pursuing the remaining financing through a combination of debt and equity, with Nordic bank Skandinaviska Enskilda Banken AB (SEB) and EIT RawMaterials GmbH involved in the process. Neometals currently holds an 86.1% stake in Recycling Industries Scandinavia AB (RISAB), which wholly owns Novana, but plans to dilute its holding to a minority position as the project progresses and additional investors come on board.

Neometals’ Managing Director Chris Reed highlighted the importance of the grant in de-risking the project and applauded the Finnish government’s support. He emphasized the strategic significance of producing vanadium with a zero-carbon footprint in the Nordic region, especially given vanadium’s critical mineral status across the EU, USA, and Australia.

Regional Economic and Industrial Impact

The project is expected to generate substantial economic benefits locally, with up to 600 construction jobs during the build phase and 150 permanent roles once operational. The Port of Pori’s logistics capabilities and skilled workforce were key factors in site selection. Local officials, including Pori’s Mayor Lauri Inna, have praised the project for strengthening regional industry, boosting exports, and fostering new educational and research collaborations.

With construction anticipated to take 2.5 to 3 years following financing closure, the Vanadium Recovery Project stands as a beacon of sustainable industrial innovation and critical mineral independence for Europe.