Australian Vanadium Limited and Technology Metals Australia Ltd have agreed to merge two adjoining projects in a bid to accelerate development of a critical battery mineral.
The two companies announced on Monday a $217 million tie-up to develop their Western Australian ore bodies.
"If successful, the transaction will create the leading ASX-listed vanadium developer and a world-class asset of scale located in a Tier-1 mining jurisdiction, Australian Vanadium CEO Graham Arvidson said.
Australia holds almost one third of the world's vanadium, an element used in metal alloys and - more recently - in industrial-scale batteries that store wind and solar energy.
Ian Prentice, managing director of Technology Metals, said the Gabanintha vanadium ore body was arguably one of the best undeveloped vanadium resources in the world.
"This all comes at a pivotal time for the global vanadium industry as vanadium flow batteries are established as a critical player in the long duration energy storage market, a key requirement for the world's transition to net zero," he said.
While they cannot provide the same power as a lithium battery used for an electric car, vanadium flow batteries have been used in Asia to back up electricity grids and small trials are underway in Australia.
The scheme has been unanimously recommended by the Technology Metals board and the largest shareholder, Resource Capital Fund with 18 per cent, has confirmed its intention to vote in favour.
AVL said it would also raise $15 million from a placement of new shares to support integration, ongoing project and corporate initiatives and general working capital and transaction costs.
The combined group would continue to trade as AVL on the ASX.
