Predator and Prey: How vanadium demand and Julia Creek M&A could fuel interest in QEM

Predator and Prey analyses emerging explorers and why they might attract acquisition interest. This time we’re looking at QEM Limited.

QEM Limited could be the target of buying interest given growing vanadium demand and burgeoning M&A in the Julia Creek region. Pic: Getty Images

• QEM Limited’s Julia Creek vanadium and energy project sits in the same region as Vecco’s vanadium electrolyte project

• Vecco attracted Japanese giant Idemitsu to increase its stake from 14.6% to 51%, taking its investment up to >$75m

• QEM’s project is differentiated by having oil shale resources that can be used to produce transport fuel

Mergers and acquisitions can be a huge value creator for shareholders, especially for those invested in the target firm.

Predator and Prey takes a close look at ASX explorers in the early stages of their journey and why they could be hunted by a larger player.

Critical minerals like vanadium are gaining increasing importance as the world scrambles to secure supplies of materials needed for high tech products such as batteries, electric motors and more.

This has resulted in companies making acquisitions to either secure projects in strategic areas or to gain outright control of companies with critical minerals.

One example is Idemitsu Australia subsidiary Idemitsu Debella securing in December 2024 a majority 51% stake in Vecco Group (up from 14.6%) and taking its total investment in the company and its namesake critical minerals and vanadium electrolyte project in Queensland to $75m.

Construction of the $798m project, which has been declared a coordinated project by the Queensland Coordinator-General, is expected to start in 2026 with operations starting from late 2027.

That's thrust eyes on Julia Creek more generally, which has emerged as a global hotspot for vanadium developments.

QEM (ASX:QEM) managing director Gavin Loyden certainly thinks that the move is an interesting one for the Julia Creek region, telling Stockhead that it highlights just how important this area is becoming for the vanadium industry.

“Idemitsu’s investment could shine a bigger spotlight on the Julia Creek region, attracting more infrastructure and industry interest that benefits everyone operating here,” he said.

“It’s a win-win situation for the region as it solidifies its reputation as a hub for critical minerals.”

He did note that while both QEM and Vecco are focused on vanadium, there are some key difference between the two projects.

“Vecco seems to be zeroing in on refining vanadium specifically for vanadium redox flow batteries (VRFBs), which are gaining traction in the renewable energy space," Loyden said.

“QEM, on the other hand, has a broader approach. We’re not just about vanadium for flow batteries – we’re also tapping into our oil shale resources to produce transport fuel, which gives us a unique edge in the market.”

QEM in line for buying interest?

The interest in vanadium, critical minerals more broadly and Idemitsu’s investment has the potential to place QEM in the line of sight of buyers.

Loyden said the company’s valuable resource base at Julia Creek certainly could make it an attractive target for a takeover bid, which is made only more so by the growing global focus on securing critical minerals.

That includes its diversified approach, with both vanadium and oil shale in QEM's production plans.

"This makes us appealing to a broader range of potential partners or acquirers, not just companies focused solely on vanadium,” he added.

“If a takeover bid were to come our way, it would likely depend on market conditions and how demand for vanadium evolves over time.

“For now, though, we’re focused on building value for our shareholders and advancing our project to capitalise on the opportunities ahead.”

The Julia Creek vanadium and energy project. Pic: QEM Limited

Making vanadium progress

QEM’s receipt of the ‘Coordinated Project Declaration’ from the Queensland government in December 2024 was described by Loyden as a huge step forward for the Julia Creek vanadium and energy project.

“This designation streamlines the entire approvals process, making it easier and faster to get through regulatory requirements while still meeting environmental and community standards,” he said.

“It also signals strong government support for what we’re doing, which is incredibly reassuring, not just for us but also for our investors and stakeholders.

“This recognition really validates the strategic importance of our project. We’re not just producing vanadium; we’re also contributing to Queensland’s critical minerals sector and renewable energy goals.

“Plus, this project is set to bring significant economic benefits to the McKinlay Shire region, with around 1200 jobs expected during construction and operation phases.”

He added the declaration enabled the company to proceed with preparing its environmental impact statement and locking in partnerships to bring the project to life.

The Julia Creek vanadium and energy project currently has a resource of 461Mt grading 0.28% V2O5 in the higher confidence indicated category. These hold a high enough degree of certainty to allow for mine planning.

Another 2.4Bt at 0.31% V2O5 sits within the inferred category, which highlights the sheer scale of the project.

It includes a best estimate (2C) contingent oil shale resource of 92 million barrels of oil equivalent – a valuable co-product in its own right.

A recent scoping study highlighted a 30-year mine schedule with a production target of approximately 10,571 tonnes of vanadium pentoxide (99.95% pure) and 313 million litres of transport fuel per annum over the life of mine.

Vanadium outlook

Loyden is also bullish about the prospects for vanadium, noting that demand has been growing steadily due to its use in both steel production and VRFBs.

“These batteries are becoming increasingly popular as more countries invest in renewable energy projects – they’re perfect for large-scale energy storage because of their long lifespan and ability to store power from solar and wind sources,” he noted.

“China is leading the charge here with stricter standards requiring more vanadium in steel production and significant investments in battery storage capacity. Globally, we’re also seeing interest ramp up in other applications like aerospace materials, which adds another layer of demand.”

Highlighting China’s investment in battery storage, Rongke Power completed a 175MW/700MWh system in December 2024, the largest of its type in the world. This system in Wushi city will provide grid forming, peak shaving, frequency regulation and renewable integration.

“On the supply side, though, there are challenges. Vanadium production is concentrated in just a few countries, which can lead to supply constraints and price volatility," Loyden said.

“That’s why projects like ours at Julia Creek are so important – we have the potential to provide a stable supply of high-purity vanadium to meet this growing demand.

“For QEM, all of this aligns perfectly with our vision. We’re well-positioned to capitalise on these trends by delivering not just vanadium but also contributing to Australia’s role as a reliable supplier of critical minerals globally.”

At Stockhead, we tell it like it is. While QEM Limited is a Stockhead advertiser, it did not sponsor this article.

Originally published as Predator and Prey: How vanadium demand and Julia Creek M&A could fuel interest in QEM