HOUSTON, February 2nd (Argus) - The U.S. Defense Logistics Agency (DLA) intends to sign a five-year fixed-price contract with American Vanadium and Largo Resources to purchase high-purity vanadium pentoxide for use in the aerospace industry.
According to the tender announcement released on January 15th, the U.S. Defense Logistics Agency, which is under the Department of Defense, initially planned to purchase up to 2,876 metric tons of vanadium pentoxide.
The Vanadium Company of Arkansas, a subsidiary of American Vanadium, produces high-purity vanadium sheets at its plant in Warm Springs, Arkansas. Largo Resources, based in Canada, produces vanadium pentoxide through the Maracás Menzés mine in Brazil.
In the awarding of the contract, the U.S. Defense Logistics Agency stated that American Vanadium is the only domestic enterprise with a large-scale aerospace-grade vanadium pentoxide production capacity, while Largo Resources is the largest supplier of aerospace-grade vanadium pentoxide in the U.S. market.
The agency also mentioned, "Due to unforeseen circumstances, Largo Resources is facing the risk of closure." Previously, due to the 50% import duties on Brazilian goods and its own cash liquidity issues, the company has repeatedly delayed the delivery of vanadium products to its U.S. customers and has had some order defaults.
