How has the Australian Vanadium (ASX:AVL) share price exploded 160% in a month?

Australian Vanadium shares have delivered some eye-watering returns. Here’s the tea!

| More on:
A woman's head literally explodes with goodness.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Green metals have been all the rage with ASX investors lately
  • One of the biggest beneficiaries has been the Australian Vanadium share price
  • So what has helped Australian Vanadium rocket more than 160% in under a month?

The ASX boards have been dominated by resources shares that have shot up in value over the past month or two. If you stick to the green metals space, you don’t need to look too far to find some stellar short-term performers.

Investors seem to be extremely bullish on this market niche right now. Take Pilbara Minerals Ltd (ASX: PLS). It’s up close to 30% over the past month. Or AVZ Minerals Ltd (ASX: AVZ), which has given investors a return of more than 52%. But the Australian Vanadium Ltd (ASX: AVL) share price is a standout performer.

Australian Vanadium shares gained an extraordinary 16.67% just today, closing at 10.5 cents a share. But it was less than a month ago that this company was trading at just 4 cents a share. That means the Australian Vanadium share price has rocketed 162.5% in under a month.

So what’s behind this eye-watering move? Well, it’s hard to say for sure. But some developments have likely pushed investors towards this small-cap vanadium share.

Australian Vanadium share price rockets higher

The first is a general appetite for companies involved in green metals, battery materials and technologies and renewable energy that we have been seeing from investors lately. Vanadium is a metal that has been identified as a potentially game-changing ingredient in a new generation of batteries known as redox flow batteries.

This technology is still emerging. But even so, many experts are excited about its potential future. Redox flow batteries use significant quantities of vanadium. So if this technology takes off, it’s not unreasonable to foresee a huge rise in the demand for the metal.

And Australian Vanadium is, of course, building out its capacity to produce this potentially green metal.

But another major development seems to have gotten investors hot under the collar for Australian Vanadium shares. Last month, the company announced that it has been awarded a $49 million grant under the federal government’s Modern Manufacturing Initiative (MMI). Australian Vanadium will use the funds to develop its Australian Vanadium Project near Geraldton, Western Australia.

Australian Vanadium is a company with a market capitalisation of just under $300 million. Thus, a grant of $49 million is a significant injection.

In its recent joint announcement with Australia, which we covered last week, the United States government has also singled out vanadium as a critical mineral. This could imply that further government assistance is possible as the US builds out secure supply chains of critical minerals.

All in all, it doesn’t get much better than the month the Australian Vanadium share price has just had.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Resources Shares

Two excited mining workers in yellow high vis vests and hardhats shake hands to congratulate each other on a mineral discovery
Resources Shares

Worried about the iron ore price? Why the need for it ‘ain’t going anywhere’: broker

The iron ore price has slipped from about US$160 per tonne in March to just above US$100 per tonne today.

Read more »

Miner on his tablet next to a mine site.
Resources Shares

Global Lithium shares edged higher today amid ‘very promising’ results

What did Global Lithium announce to the market?

Read more »

A white EV car and an electric vehicle pump with green highlighted swirls representing ASX lithium shares
Resources Shares

Why is the Sayona Mining share price surging 8% on Friday?

The Federal Government is talking up the need for electric vehicles in Australia today.

Read more »

Two Firefinch miners dressed in hard hats and high vis gear standing at an outdoor mining site discussing a mineral find with one holding a rock and the other looking at at his ipad
Resources Shares

Could Porsche’s new test run threaten the outlook for ASX lithium shares?

Lithium miners and explorers have benefited from soaring lithium prices.

Read more »

A young woman looks at something on her laptop, wondering what will come next.
Resources Shares

Why did the Lake Resources share price pop and then stop on Friday?

The clean lithium developer soared 8% this morning before partially retreating. Here are the details.

Read more »

A green bubble or balloon bursts on a man's face.
Resources Shares

1 factor that could drag on Fortescue Future Industries’ green dream

There’s a major factor that could impact how well FFI can do.

Read more »

A boy is about to rocket from a copper-coloured field of hay into the sky.
Resources Shares

Guess which ASX copper share has exploded 182% this week?

This ASX copper share has risen 182% since last week alone...

Read more »

tradie holding a laptop computer displaying ASX share price and scratching his head looking confused
Broker Notes

Are Rio Tinto shares a buy? See what top brokers are saying

The miner's share price has struggled to make ground in recent months.

Read more »