Bushveld Minerals, SA’s largest producer of vanadium, will continue ramping up production after a disrupted 2020, and grow its exposure to the energy market.
Bushveld, which is listed in London, increased annual vanadium output for the year to end-December by a quarter to 3,361 tonnes despite disruptions to its SA operations caused by the national lockdown in March to combat the Covid-19 pandemic, heavy rain and unplanned maintenance.
Vanadium is used to make steel as well as large batteries for industrial applications.
Production fell short of guidance of 3,660 tonnes to 3,940 tonnes, but its sales shot up 78% to 4,264 tonnes to meet higher demand from customers in the second half of the year.
Looking ahead, Bushveld intends increasing production to between 4,100 tonnes and 4,350 tonnes for 2021. This guidance includes the 35-day closure of its Vametco plant in the first quarter for a maintenance programme.
The 35-day shutdown is to address the unscheduled stoppages Bushveld experienced during 2020 and to restore reliability, said CEO Fortune Mojapelo. The last big maintenance shutdown was in 2019.
Bushveld is building an electrolyte plant in East London. Electrolytes are used in vanadium redox flow batteries, a type of electrochemical cell in which chemical energy is provided by two chemical components dissolved in liquids, which can be used by power utilities and companies relying on solar and wind electricity generation to store power and release it when needed.
Bushveld’s increased output for 2020 stemmed from the inclusion of the Vanchem operations it bought.
Sales to China comprised a fifth of annual sales.
The average vanadium price was a disappointment during the year, halving to $23 (R346)/kg, but Mojapelo said the global price for vanadium was starting to rise, coinciding with Bushveld's growth.
To fund its growth, Bushveld secured $65m from Orion Mine Finance in September. A key plank in Bushveld’s strategy is refurbishing the Vanchem plant after it was neglected with minimal spending by previous owners.
“Vanchem’s three-kiln configuration allows the plant to operate without the need of a shutdown while maintenance is being conducted,” Mojapelo said.
Bushveld had nearly $51m of cash on its balance sheet at the end of December and it has a R125m loan facility with Nedbank.
Bushveld was using its own operations to run renewable energy sources combined with a vanadium redox flow battery to show potential clients the system works and the financials of using the battery.
“We have identified energy needs of more than 125MW of solar ... and 180MWh [megawatt hours] of battery energy storage systems within our own facilities and in due course will unveil our strategy around this exciting opportunity,” Mojapelo said.
A major growth project in the future is the Mokopane project which, with its resource of 298-million tonnes of vanadium, is one of the world’s largest primary sources of the mineral.
Bushveld will start a R40m definitive feasibility study at Mokopane during 2021 to build a shallow mine to provide the Vanchem plants with material.
The Vanchem operation has enough stockpiled material to keep it running during the first half of this year and Bushveld can supply it material from Vametco until the mine is built.
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