The Danish Government wants to fund this ASX stock’s vanadium project

Wed 18 Jan 23, 10:40am (AEST)
The red flag of the Kingdom of Denmark flies beneath a blue sky
Source: Unsplash

Key Points

  • Technology Metals’ WA-based vanadium project has landed on the radar of the Kingdom of Denmark’s international financing arm
  • Denmark is a major source of sovereign loans for renewable energy projects around the world
  • Indicative letter of support is not binding

Technology Metals Australia (ASX:TMT), developing the ilmenite and vanadium producing Murchison Technology Metals Project (MTMP), revealed on Wednesday the company has received an indicative show of financial support from the Kingdom of Denmark. 

With a focus on renewable energy projects, the investment financing arm of the Danish government has sent Technology Metals a Letter of Interest (LOI) outlining proposed support of A$150m. 

Key conditions must be met if the Danish government proceeds with that payment. They are: 

  • Sufficient economic interest for Denmark warranting loan

  • Acceptable credit risk around the deal 

  • The loan must satisfy OECD export credit guidelines 

  • ESG due diligence 

  • Satisfactory “documentation and security”

Vanadium pentoxide as ESG breakthrough

The MTMP has landed on Denmark’s radar due to its implications for Battery Energy Storage Systems (BESSies). 

BESSies are essentially grid-scale power storage assets that allow renewable energy to be stored for days at a time and dispatched quickly into electricity grids.

Technology Metals is progressing with research investigating the use of vanadium electrolyte (for those playing at home, vanadium pentoxide) refined downstream in BESSies to ultimately boost the ability of the technology to retain power. 

The longer that excess power from wind and solar can be stored, the more realistic a complete departure from coal and hydrocarbons becomes. 

“The TMT team is undertaking considerable work in progressing the MTMP funding strategy, including engagement with a range of institutions,” Technology Metals MD Ian Prentice said. 

What’s this about Denmark? 

Denmark’s Export Credit Agency merged with Vaekstfonden (the Danish Growth Fund) and the Gronne Investeringsfond (Danish Green Investment Fund) at the start of January this year to become Denmark’s Export and Investment Fund (“EKF”). 

The Danish Export Credit Agency is a financier of wind energy and solar energy products around the world. 

Its merger with the Gronne Investeringsfond underscores the agency’s ESG-minded remit. Technology Metals noted the supplier of mining and industrial equipment for the MTMP, FLSmidth, is well known to the Danish entities. 

“We are also very happy to be working again with EKF on this who has expressed interest in supporting Technology Metals with their financing arrangements for key items,” FLSmidth APAC President Tamer Eid added.

A look at Technology Metals' six month charts
A look at Technology Metals' six month charts
Disclaimer: Market Index helps small-cap ASX listed companies connect with Australian investors through clear and concise articles on key developments. Technology Metals was a client at the time of publishing. All coverage contains factual information only and should not be interpreted as an opinion or financial advice.


Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication.

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