Western Australia Launches Major Vanadium Strategy to Build Battery Supply Chain

Western Australia is positioning itself as a critical hub for advanced energy storage by rolling out a 2.5 percent royalty rate on vanadium products effective February 4, 2026. This policy move, announced jointly by Minister for Mines and Petroleum David Michael and Minister for Energy and Decarbonisation Amber-Jade Sanderson, marks a pivotal step toward establishing the region’s vanadium battery manufacturing ecosystem. The initiative fulfills a key election commitment from the Cook Government and signals a broader shift toward downstream processing and value-added industries beyond raw material extraction.

Setting the Vanadium Royalty Framework

The 2.5 percent royalty rate represents a strategic incentive designed to accelerate vanadium production in Western Australia while supporting the development of a competitive battery supply chain. Critically, the government maintains a zero royalty rate on vanadium electrolyte production—a deliberate choice to encourage higher-value manufacturing activities and keep advanced processing capabilities within the state. This tiered approach reflects policymakers’ recognition that vanadium’s true economic potential lies not in exporting raw ore, but in building integrated production and battery assembly operations.

Kalgoorlie’s Flagship Vanadium Battery Project

The centerpiece of this strategy is a 50-megawatt, 10-hour vanadium battery energy storage system (VBESS) slated for deployment in Kalgoorlie by 2029. Once operational, this facility will represent the largest vanadium flow battery installation in Australia. The project targets 150 direct construction jobs and creates a foundation for establishing Kalgoorlie as a regional manufacturing hub. Minister Sanderson emphasized the broader vision: “Installing a Vanadium Battery Energy Storage System reflects our commitment under the Made in WA plan to diversify the economy, position Western Australia as a renewable energy leader, and develop advanced manufacturing capabilities locally.”

Building a Vanadium Production Ecosystem

The government’s long-term vision extends beyond the Kalgoorlie battery installation. Plans include developing a local vanadium electrolyte production facility and battery assembly industry co-created with private sector partners. This integrated approach transforms Kalgoorlie into a center for downstream processing and exports, creating cascading opportunities throughout the regional economy. By connecting raw material extraction to high-value manufacturing, the strategy positions vanadium as a catalyst for economic diversification and energy infrastructure resilience.

Industry Support for Vanadium Development

The Association of Mining and Exploration Companies (AMEC) welcomed the revised royalty framework, recognizing it as crucial support for developers and investors navigating the early stages of the vanadium sector’s growth. AMEC CEO Warren Pearce noted that “Western Australia’s exceptional vanadium resources provide a unique advantage for long-duration energy storage, supporting grid stability and broader decarbonisation goals.” He added that maintaining zero royalties on vanadium electrolyte reinforces the state’s commitment to retaining advanced manufacturing value within regional communities.

The government continues to invite expressions of interest from businesses looking to participate in the vanadium supply chain development, signaling openness to partnership and innovation across the sector.