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Bushveld Minerals
from RGN Vol 7 Iss 7
BUSHVELD MINERALS
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2019 was another busy year for South African vanadium producer Bushveld Minerals. The London-listed company cemented its position as one of the world’s largest vertically integrated primary producers of vanadium – a unique metal with properties that have traditionally fed the steel manufacturing sector, but more recently its applications have been realised in the emerging energy storage sector. Bushveld added a fourth vanadium asset to its diversified resource base in South Africa’s Bushveld Complex with the acquisition of Vanchem in November 2019. Bushveld also undertook a Transformation Programme at its operational Vametco mine which resulted in record production outcomes in 2019. The company also made progress towards its goals in the exciting vanadium-based energy storage industry, in the shape of investments in Original Equipment Manufacturers (OEMs) redT-Avalon and Enerox.
Integrating Vanchem
In November 2019, Bushveld announced it had completed the acquisition of Vanchem – a primary vanadium processing facility with a beneficiation plant capable of producing various vanadium oxides, ferrovanadium and vanadium chemicals.
“The acquisition is consistent with the company’s long-term strategy of acquiring existing, low-cost scalable brownfield operating assets in South Africa to expedite the development of the company’s significant and high grade resource base,” says Bushveld’s CEO Fortune Mojapelo.
Vanchem adds around 960 metric tonnes of vanadium (mtV) to the group’s current annual production from the Vametco mine, which produced a record 2,833 mtV in 2019.
In addition, Bushveld has embarked on a five-year refurbishment and ramp-up programme at Vanchem which will eventually boost steady state production to 4,200 mtV per annum, supporting the company’s long-term goal of an 8,400 mtV annual production rate.
The Vanchem acquisition serves to diversify Bushveld’s mining and processing footprint in South Africa, while also creating operational and business case synergies between the Vametco, Vanchem and Mokopane facilities, all of which are located within relative proximity and connected by road and rail.
Bushveld’s lofty ambitions in the global energy storage space are also well served by the Vanchem acquisition. The existing chemical plant at Vanchem provides additional feedstock options for vanadium electrolyte manufacturing, the most expensive component in vanadium redox flow batteries (VRFBs).
Plugging in to energy storage
Through the Bushveld Energy platform that was launched in 2016, the company aims to capture a share of the rapidly emerging energy storage market, where VRFBs present a compelling proposition in providing long duration storage solutions.
“VRFBs are well positioned to take a significant share of the stationary energy storage market, on account of their unique features that give them an edge in large scale, stationary and long-duration energy storage applications,” explains Mojapelo.
These advantages include: Long lifespan cycles with the ability to repeatedly charge/ discharge over 20 years with minimal degradation, low cost per kWh when fully used at least once daily, scalable capacity to store four to 10 hours of energy daily and flexibility that allows for capturing the multi-stacked values of energy storage in grid applications.
While VRFBs not only benefit the burgeoning renewable energy sector, perhaps more significantly, the technology helps make existing power systems more efficient through load balancing and other forms of grid savings.
“Research from Navigant forecasts that the size of the energy storage market will reach US$50 billion within the next 10 years, which represents a growth rate of 58% a year to exceed 100GWh of capacity by 2027.
“While multiple technologies are expected to be successful due to their unique technical and cost advantages and suitability to local conditions, Navigant expects flow batteries to capture approximately 18% of the market, which equates to approximately 20GWh of demand and nearly $10 billion in revenue in the coming decade.
“In addition, approximately 5.5 tonnes of vanadium is used for per MWh, which means that in 2027 vanadium use in VRFBs could be between 50 and 80,000 mtV.” Bushveld is well positioned to capitalise on this huge projected vanadium demand from the VRFB sector thanks to its globally significant resource base of 550 million tonnes (100% basis) grading 1.58-2.0% V205 in magnetite and its low cost, flexible and scalable primary vanadium processing facilities at Vametco and Vanchem.
“Bushveld’s vertical integration strategy and synergies across
its assets provide flexibility for the group to deliver on the entire vanadium value suite by being able to produce various vanadium feedstocks that can be converted into electrolytes for VRFBs.”
Downstream investments
Bushveld further underlined its ambitions in the downstream vanadiumbased energy storage sector by establishing a VRFB Investment Platform to lead investments in this space.
VRFBs are well positioned to take a significant share of the stationary energy storage market, on account of their unique features that give them an edge in large scale, stationary and longduration energy storage applications” Fortune Mojapelo, CEO Bushveld Minerals
The platform will allow the company to mobilise additional third-party financing to support VRFB manufacturers’ efforts to scale up their capacity.
The first action made by Bushveld under the VRFB Investment Platform was to provide a US$5 million loan to support the merger of UK energy storage provider redT with US VRFB manufacturer Avalon Battery Corp.
“This investment is in line with the company’s strategy of building a leading downstream vanadium-based energy storage platform.”
The interim funding creates an investment into a scaled-up VRFB OEM with the potential to become a leading, global battery energy storage systems supplier, and gives Bushveld preferential supply rights to the new company for at least two years. In addition to the redT-Avalon investment, Bushveld joined a consortium for the acquisition of another VRFB OEM before the end of 2019, in the shape of Austrian firm Enerox – a pioneering company with over 10 years’ experience in the production of VRFBs.
“Bushveld’s participation in this investment expands our VRFB investment platform, demonstrates our belief in VRFB technology, and helps
grow both the VRFB and the was completed and tendering overall vanadium market,” says for its construction is now Mojapelo. in process. Bushveld is also In addition, Bushveld is the electrolyte and rolled out building a 200MWh vanadium the first vanadium electrolyte electrolyte production rental contract in June 2019 in facility in the East London the US with Avalon. Industrial Development Zone, adding a financial product to together with the Industrial Project Development Corporation to development supply local and international with energy VRFB projects. storage With its dedicated project In 2019, the EIA for the site development team, Bushveld Energy aims to address Africa’s greatest obstacle to faster growth and industrialisation: Reliable electricity supply.
In 2019, Bushveld Energy announced the development of a 1MW mini-grid at the Vametco mining and processing facility. The mini-grid combines 2.5MW of solar PV generation and 1MWh/4MWh of energy storage using VRFB technology, co-located at the
Bushveld Minerals’ strategy:
Building a sustainable cash-generating, high-grade low-cost platform with a production of 8,400 mtV pa Leveraging its production platform to build a leading stationary energy storage player participating in the vanadium redox flow battery value chain through the supply of electrolyte, project development and ownership of VRFB technology
The Group’s vertical integration strategy and synergies across the assets provide flexibility for:
Sourcing feedstock, which can mitigate capital requirements in a volatile pricing environment Final products, which can help to maximise sales depending on product demand dynamics Enabling the Group to deliver on the entire vanadium value suite while being in a solid position throughout the vanadium price cycle
BUSHVELD MINERALS AT A GLANCE
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AIM:BMN
MARKET CAPITALISATION
US$220 million (as of December 17, 2020)
a j
Vametco mine and processing facility.
The project will demonstrate the technical and commercial capability of hybrid minigrids using solar PV and VRFB technology, while reducing the mine’s dependence on the power grid and cutting its CO2 also be scaled up further to provide a larger amount of energy in future. The opportunity for energy storage in South Africa is even more significant. The country’s
emissions. The project could Integrated Resource Plan 2019 specifically seeks novel ways to improve grid reliability and access to power over the long-term, with a dedicated allocation of over 2,000MW for new energy storage.
This includes the recently announced 350MW/1400MWh Eskom battery programme
that is part of an even larger World Bank Energy Storage initiative. On top of that, significant opportunities exist in the soon to be restarted Renewable Energy Independent Power Procurement (REIPP) programme.
A bright future
Despite vanadium prices retreating from an astronomical three-year run in 2019, Bushveld believes the long-term outlook for the market remains strong.
With its unrivalled asset base in South Africa and its rapidly expanding interests in the stationary energy storage sector, Bushveld finds itself in an excellent position to continue building a fully integrated vanadium company in 2020 and beyond. Over the next 12 months, the company plans to unlock multiple synergies across the Vametco, Vanchem and Mokopane assets, and will continue advancing Bushveld Energy’s position in the growing VRFB market.
AFRICA. IN THE PALM OF YOUR HAND.
