New scientific breakthroughs have raised battery developers’ interest in the potential of zinc as a key component in energy storage technology – and a potential replacement for lithium.
The market interest in zinc’s potential as a battery component was highlighted recently when Gelion Plc (AIM: GELN) successfully listed on the London Stock Exchange (LSE) on the back of its “revolutionary” zinc-bromide technology.
The company raised £16M of new funds with a market capitalization on admission to trading on the LSE of £154M.
The company operates two divisions. One is for the delivery of stationary energy storage through its proprietary non-flow zinc-bromide battery technology. These “Endure” batteries can operate without air-conditioning in temperatures up to 50 degrees Celsius and are highly resistant to fire or thermal runaway.
Gelion recently signed a memorandum of understanding (MoU) with Mayur Resources (ASX: MRL) to potentially supply hundreds of megawatt-hours of battery systems for power projects in Papua New Guinea from 2022 to 2027.
Salient comparison
Another company that has successfully developed a zinc-ion battery is Canada’s Salient Energy. The privately held company says zinc-ion has several potential advantages over lithium-ion, particularly in the area of available raw materials and potentially significant cost savings. It also suggests that compared to lithium-ion batteries, zinc-ion batteries are safer.
The company says zinc-ion alone poses no fire and explosion concerns as it uses a water-based chemistry that results in the inability for fires to physically occur. Salient Energy says this key feature makes zinc-ion batteries especially attractive for residential and commercial energy storage.
Production on the rise
The growing interest in zinc’s use in energy storage technology has helped lead to a significant rise in production. According to leading resource industry research firm GlobalData, international zinc production is expected to recover by 5.2% in 2021 to reach 12.8Mt.
The leading data and analytics company notes that production declined by approximately 5.9% to 12.1Mt in 2020, mainly due to COVID-19-related lockdowns and restrictions; however, looking ahead, zinc production over the forecast period (2021–2025) is expected to grow at a compound annual growth rate (CAGR) of 2.1% to reach 13.9Mt in 2025.
“Bolivia’s zinc was particularly affected by the pandemic in 2020, but production is now expected to recover,” Vinneth Bajaj, mining analyst at GlobalData, says.
“Mines in the region, such as the Colquiri, Cerro Rico and San Cristobal sites, are now reopening. Similarly, the re-opening of Peru’s Chungar Mining Unit, and El Porvenir and Cerro Lindo mines is expected to increase production in the country by 9.4%, to reach 1.5Mt in 2021.
“However, production is not recovering in all regions, as declines are expected in Canada (-5.8%) and Brazil (-19.2%) – mainly due to scheduled zinc mine closures and planned maintenance shutdowns.
“The U.S., India, Australia, and Mexico will be the key contributors to zinc production growth in 2021-2025. Combined production in these countries is expected to increase from a forecasted 3.6Mt in 2021 to 4.2Mt in 2025,” Mr Bajaj says.
Key global zinc mine projects
One key upcoming project is the Aripuanã Zinc mine in Brazil, which is jointly owned by Votorantim and Karmin Exploration (TSXV: KAR), and is currently under construction. By March 2021, 79% of the works were completed. The project will have an annual zinc production capacity of 72.7Kt and is expected to commence operations in the third quarter of 2022.
Another major development is the Pavlovskoye project in Russia, which is 99.5% owned by State Atomic Energy Corporation Rosatom and is currently undergoing a definitive feasibility study. The US$400M project will have an annual zinc production capacity of 223Kt and is expected to commence operations in 2023.
Lastly, the Kudz Ze Kayah project in Canada, which is wholly owned by BMC Minerals Ltd (UK), is currently undergoing a definitive feasibility study (DFS), and is awaiting regulatory approvals and permissions. The project will have an annual zinc production capacity of 106.6Kt and is expected to commence operations in 2023.
Canada’s Tinka Resources Limited (TSXV: TK) recently unveiled an updated Mineral Resource Estimate (MRE) for its 100%-owned Ayawilca project in Peru.
The estimates for two Ayawilca deposits (the “Zinc Zone” and “Tin Zone”, respectively) have been updated as a result of nearly 12,000m of drilling completed in the past 18 months.
Key highlights of the Updated Mineral Resource Estimates at Ayawilca include:
- Indicated Zinc Zone Mineral Resource of 19.0Mt grading 7.2% zinc, 0.2% lead and 16.8 g/t silver containing 3.0B lbs of zinc
- Inferred Zinc Zone Mineral Resource of 47.9Mt grading 5.4% zinc, 0.4% lead & 20.0 g/t silver containing 5.7B lbs of zinc
Tinka’s president and CEO, Dr Graham Carman, says a major step forward has been achieved at the Ayawilca Zinc and Tin Zones.
“The large increase in Indicated Zinc Zone resources to 3.0B lbs of contained zinc (previously 1.8B lbs) is a 68% increase.
“Tinka has been growing the Ayawilca Mineral Resources consistently since 2015, and we have taken great strides positioning it as one of the largest and highest-grade undeveloped zinc dominant deposits in the Americas.”
Market opportunities
The outlook for zinc is also closely linked to growth in galvanized steel products. This includes steel used in bridges, high-rise buildings, and ships, which is exposed to the weather and cannot risk having its structural integrity compromised.
Commodity Insights has forecast world zinc consumption to rise gradually over the outlook period – from 13.7Mt in 2019 to 15.3Mt in 2030. This forecast represents 12% growth over the forecast period (or a CAGR of 1.0% per annum).
It pointed to rising urbanization in heavily populated Asian nations will be the main trend supporting increased use of galvanized steel over the next decade, particularly with a move to taller apartment buildings with higher steel intensity.
Meanwhile, Fortune Business Insights says the global zinc oxide market size is predicted to reach US$6.36B by 2026, exhibiting a CAGR of 5.7% during the forecast period of 2019 to 2026. The zinc oxide market share stood at US$4.10B in 2018.
It reported that zinc oxide, a vital ingredient in the manufacturing of foot powders, makeup, bath soaps, and baby lotions, is seeing an increasing uptake by the cosmetic and pharmaceutical industry.
