EIT RawMaterials Increases Stake with €0.494M Funding for Vanadium Plant

Second EU-Backed Investment Strengthens Finnish Vanadium Project

Neometals Ltd (ASX: NMT) has announced a significant follow-up capital injection from EIT RawMaterials, the European Union co-funded innovation group, to support the development of its Finnish Vanadium Recovery Project (VRP1). This second tranche of €0.494 million (approximately A$818,000) will bolster ongoing technical work as the project advances through its financing phase.

The funding agreement increases EIT RawMaterials’ minority shareholding in Recycling Industries Scandinavia AB (RISAB), the vehicle through which Neometals holds an 87.1% interest, to 2.2% at a pre-money valuation of €50 million. This follows an initial €0.5 million investment in September 2024, underscoring the EU-backed group's growing confidence in the project’s potential.

Advancing Sustainable Vanadium Production in Europe

The Finnish Vanadium Recovery Project aims to produce high-purity vanadium pentoxide (V2O5) from steelmaking slag using Neometals’ patent-pending hydrometallurgical process. The feasibility study previously confirmed the project’s ability to deliver vanadium at lowest-quartile operating costs with a low-to-negative carbon footprint, aligning with Europe’s strategic push for sustainable critical materials.

Novana Oy, a subsidiary of RISAB, holds the exclusive license for the VRP technology across the Nordic region and has secured key project milestones including environmental permits and a binding offtake agreement with Glencore International AG for 100% of the plant’s output. The project is currently seeking approximately €400 million in financing, targeting a 40% equity and 60% debt structure, with leading Nordic banks SEB and Aventum managing the process.

Strategic EU Support and Market Implications

Bernd Schäfer, CEO of EIT RawMaterials, emphasized the strategic importance of the investment: "Our continued support reflects confidence in Novana’s technology and team, and our commitment to accelerating raw materials innovation in Europe. This project is poised to become the continent’s first domestic producer of high-purity vanadium, a critical resource for industries ranging from aerospace to energy storage."

Neometals Managing Director Christopher Reed highlighted the significance of the funding in maintaining momentum: "With conditional confirmation of European Investment Bank debt financing, this capital injection enables us to progress technical programs while finalising the remaining project financing. The Finnish and EU support underscores the strategic value of establishing a local vanadium supply chain."

Looking Ahead: Financing and Commercialisation

While Neometals expects to dilute its stake as new investors come on board, the company will continue to benefit from a 2.5% gross revenue royalty on all products generated from its VRP technology. The next 18 months are critical, with EIT RawMaterials holding an option to invest up to €10 million more, contingent on project milestones and equity commitments exceeding €160 million.

The Finnish Vanadium Recovery Project represents a compelling case of EU-backed innovation driving sustainable critical materials production, with potential ripple effects across the European metals and energy sectors. As the project financing process unfolds, market watchers will be keen to see how this pioneering initiative shapes the continent’s strategic raw materials landscape.