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Strong Market Response to QEM Limited’s (ASX:QEM) Green Hydrogen Strategy

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Summary

  • QEM’s share price has responded strongly to the Company’s pursuit of a “green” hydrogen strategy.
  • QEM has initiated studies to assess the green hydrogen opportunities on site at the company’s flagship 100%-owned Julia Creek project.
  • Progression of strategy comes amid buoyant market conditions, a supportive policy
  • environment and optimal project location.

QEM Limited (ASX:QEM) recently announced that it has commenced studies into “green” hydrogen production, as it continues to methodically progress its dual commodity Julia Creek vanadium and oil shale project in Northern Queensland.

The studies will investigate the financial and regulatory requirements of the Company to produce hydrogen on site at Julia Creek using a solar-powered electrolyser.

The creation of hydrogen is considered green if renewable energy, such as solar panels or solar concentrators, are used to generate electricity for electrolysis of water, which creates no carbon dioxide during the production process and can be used for energy, transport and other industrial purposes.

Source: QEM Ltd

Green Hydrogen Vision

QEM envisions that the hydrogen will initially be used to support the energy needs of other resources projects located in the North West Minerals Province of Queensland, but ultimately for the hydrogeneration of the QEM’s raw oil into transport fuels.

Robust Policy and Macroeconomic Environment

The advancement of the green hydrogen production strategy comes amid growing investment and interest in the renewable energy source from both the private and public sectors.

This is highlighted by the Queensland state government’s recent appointment of Australia’s first dedicated minister for hydrogen. The government has stated that it expects hydrogen to play in a key role in both a major new export opportunity for the state and the local economy.

QEM will commence discussions with the recently appointed Queensland Minister for Energy, Renewables and Hydrogen on the approval process.

The Julia Creek project is conveniently located in the North West Minerals Province in Queensland and also falls within the newly designated Eastern Resource Development Corridor, which is home to numerous other resource projects, providing QEM with significant opportunities to support the energy needs of these companies to develop their projects, as well as QEM’s own project. This is particularly relevant as the demand for renewable energy sources grows.

Julia Creek is also positioned in a transport nexus in North Queensland, as road trains and trucks travelling along the Flinders Highway to Townsville typically need to refuel in the Julia Creek area. This presents additional local opportunities to QEM in the longer term if the proliferation of hydrogen powered vehicles emerges.

Julia Creek Project Remains on Track

Pursuing the green hydrogen strategy aligns with QEM’s broader strategic direction it does not anticipate any material adverse impacts on the development of the Julia Creek vanadium and oil shale project stemming from the advancement of the hydrogen strategy.

The Julia Creek project currently contains a globally significant JORC (2012) Vanadium Resource of 2,760Mt (220Mt Indicated and 2,540Mt Inferred) with an average V2O5 content of 0.30% along with a Contingent oil resource of 783 MMbbl of oil.

Hydrogen is a critical element for the hydrogeneration of oil, and on 21 July 2020, QEM had announced that test work utilising a hydrocarbon solution for oil shale extraction at Julia Creek resulted in oil yields up to 181 kg per tonne, which is 218% on those reported under Modified Fischer Assay (MFA).

The Julia Creek project is continuing to progress towards Pre-Feasibility Study stage.

Source: QEM report

On 15 March 2021, QEM closed the day’s trade at $0.165, up 101.2%.

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