Australian Vanadium Limited (AVL) has secured a non-binding letter of interest from the Export-Import Bank of the United States (EXIM) for potential debt funding of up to $31m (A$45.31m).

The funding is intended for the development and construction of the Australian Vanadium Project.

EXIM's proposed financial support is contingent on the use of US-sourced equipment for the project.

AVL's ongoing optimised feasibility study aims to increase the project's US content, potentially enlarging the financing EXIM can offer.

However, any financial backing from EXIM will be subject to the bank's policies, procedures and due diligence, as well as approval from its board of directors.

The Australian Vanadium Project encompasses a mining operation and associated processing facilities in Western Australia, as well as a vanadium electrolyte manufacturing plant in Perth.

Currently, the project’s optimised feasibility study is advancing, with milestones such as mining plan finalisation and infrastructure optimisation in the works.

AVL CEO Graham Arvidson said: “Receiving support from agencies such as EXIM to help fund the project demonstrates its advanced and significant nature. AVL is working with a range of export credit agencies around the world, including Australia, in addition to commercial banks, to help secure finance to support the development of the project.

“Vanadium is classed as both a critical and battery mineral, with countries around the world looking to establish secure supply chains. Working with the US aligns with the Australian Federal Government’s strategic goals for the critical and battery mineral industries.”

In May 2023, AVL signed a A$49m commonwealth grant agreement with the Commonwealth of Australia to support its namesake vanadium project.

The agreement, which took effect on 29 May 2023, will be valid until 31 July 2026.