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American Vanadium: Energizing Solutions

The Challenge You’re the CEO of a Canadian mining and exploration company whose resources have been focused on extracting vanadium—a …

The Challenge

You’re the CEO of a Canadian mining and exploration company whose resources have been focused on extracting vanadium—a rare earth metal—from a significant deposit in Nevada since 2006. You’re now a few years away from production and ready to shift your focus to sales and distribution—ideally by leveraging vanadium’s potential role in renewable energy.

The Context

Traditionally used as an additive to strengthen steel, vanadium is increasingly seen as having great potential for use in mass energy storage and next generation lithium-vanadium batteries. Currently, “green” energy sources such as wind and solar power are problematic because the sun doesn’t always shine and the wind doesn’t always blow—which is why large-scale energy storage in a “dispatchable” form has long been the Holy Grail of renewable energy. Dispatchable power allows utilities to deliver electricity on-demand, meaning the lights go on when you flip a switch, and not only if the wind is blowing. Vanadium flow batteries (VFBs)—essentially massive vats of vanadium in sulphuric acid that allow the continual storing and discharging of electrical energy—can deliver that capability, says Bill Radvak, CEO of American Vanadium, the company developing the only dedicated vanadium mine—the Gibellini Project—in the U.S., which currently imports 100 percent of its vanadium largely from Venezuela, China, South Africa and Russia. Projected to produce 3 million tons per year, the Nevada site would be able to supply about 50 percent of the U.S.’s annual vanadium demand or about 5 percent of the world demand (2012).

The Hurdle

Over the two years since Radvak took the helm, the company’s business strategy has evolved from excavating vanadium for sale to steel companies to becoming a player in the emerging energy storage market. “Vanadium doesn’t burn out,” explains Radvak, a mining engineer with extensive technology experience (he co-founded the biotech company Response Biomedical and served as its CEO). “So we realized—light bulb—we don’t want to just be a supplier. We want to build a company that’s going to go all the way down that value proposition.” Since barriers to entry precluding getting into the battery business from the ground up, that means forging partnerships with larger, established firms.

The Resolution

In March, American Vanadium announced a licensing agreement with Battelle for use of a mixed-acid electrolyte technology that increases the energy density and operating temperature range of VFBs—a move Radvak dubbed “a strong first step” in its strategy. In a separate agreement, PNNL also agreed to independently evaluate the development of the electrolyte being produced from its Gibellini Project. The company is also in the process of adding a small-scale solar and wind facility to its Nevada mine. Described as a “micro-grid,” the facility will store excess power in vanadium flow batteries, thereby showcasing their potential.

The Endgame

American Vanadium has completed a bankable feasibility study with strong financial outcome, and is actively seeking partnership opportunities in the clean tech mass energy storage and battery production industries, says Radvak, who is optimistic about its future. “In its March 2012 forecast, Lux Research estimates grid storage demand will be $113 billion by 2017—at which time Vanadium Flow Batteries are expected to become the battery leader with a 33 percent market share,” he says. “This highlights the growing value of having the only significant in-ground supply of vanadium in the US. We’ve got a really unique opportunity on this new green tech wave.”

The Lessons

From his journey in reshaping American Vanadium’s business Radvak offers the following takeaways:

Never Show Fear. Radvak says he enjoys the dynamics and creative process of the early stage startups, but acknowledges that by nature they involve periods of difficulty and the need to adapt quickly to unanticipated challenges that emerge. “It’s critical to maintain a strong steady presence with all stakeholders, from investors to employees,” he says. “This means to continue to be upfront about the situation, but internalizing your fears while exhibiting positive leadership in trying times is paramount.”

Hire the Person, not the Position. Steer clear of potential employees who have all the qualifications and experience you’re looking for, but don’t share the culture and values of the company, advises Radvak. “It always will be a wrong fit and end with the employee leaving,” he says. “Hire people with the strong cultural and value fit with the organization—even if they aren’t the best fit for the job, they will evolve to be important team members.”

Only Work with People You Like. “Don’t sacrifice and work with someone you don’t trust, admire and respect because you believe that the ends justify the means,” urges Radvak. “There are always going to be many ups and downs in the life of any venture, all accompanied with stress and pressure. This will strain the relationships in the organization. To survive and grow from those times, it is always best to begin with strong relationships with people whom you want in your trench.”

About Jennifer Pellet

As editor-at-large at Chief Executive magazine, Jennifer Pellet writes feature stories and CEO roundtable coverage and also edits various sections of the publication.