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    WA vanadium royalty cap: project cost certainty explained for engineers

    February 5, 2026|

    Reviewed by Tom Sullivan

    WA vanadium royalty cap: project cost certainty explained for engineers

    First reported on Australian Mining

    30 Second Briefing

    Western Australia has moved to cap the royalty rate for vanadium products at 5 per cent of the realised value, giving long-term fiscal certainty to developers in a state that hosts the world’s largest share of economic demonstrated vanadium resources. The decision is aimed at projects such as the Australian Vanadium Project near Meekatharra and Technology Metals Australia’s Murchison Technology Metals Project, both targeting vanadium pentoxide for steel alloys and grid-scale vanadium redox flow batteries. For geotechnical and civil teams, the clearer cost base may accelerate approvals, detailed design and construction scheduling for associated open pits, tailings storage and processing plants.

    Technical Brief

    • Certainty on maximum government take simplifies discounted cash flow modelling for large open‑pit vanadium mine schedules.
    • Stable royalties reduce sensitivity of pit optimisation shells to price/grade assumptions in vanadium block models.
    • Tailings storage facility sizing and staged lifts can now be aligned with more predictable life‑of‑mine tonnages.
    • Processing plant layouts for vanadium pentoxide and downstream products gain clearer basis for power, water and reagent contracts.
    • Similar royalty certainty could materially affect cut‑off grade selection and strip ratio strategies in other battery‑metal projects.

    Our Take

    Vanadium appears only sparsely in our database compared with iron ore and lithium, so Western Australian policy certainty here is likely aimed at nurturing an early-stage specialty metals segment rather than managing a mature export industry.

    Among the 124 Policy stories in our coverage, Western Australia features frequently in relation to critical minerals frameworks, suggesting this vanadium move aligns with a broader state strategy to anchor downstream battery-materials investment locally.

    For vanadium projects in Western Australia targeting grid-scale battery applications, predictable royalties can materially affect bankability, as financiers typically treat fiscal stability as a key risk differentiator between Australian and competing African or South American jurisdictions.

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    Prepared by collating external sources, AI-assisted tools, and Geomechanics.io’s proprietary mining database, then reviewed for technical accuracy & edited by our geotechnical team.

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