Producer to derisk vanadium operations

  • Monday, March 02, 2020

  • Keywords:vanadium ferroalloys steel
[Fellow][] Energy storage solutions provider Bushveld Energy intends to secure partial self-supply of electricity at all Bushveld Minerals operations in South Africa this year to mitigate the risks associated with the potential deterioration of State-o...

[] Energy storage solutions provider Bushveld Energy intends to secure partial self-supply of electricity at all Bushveld Minerals operations in South Africa this year to mitigate the risks associated with the potential deterioration of State-owned power utility Eskom and the national power system.

This is part of proving its business case for vanadium redox flow battery (VRFB) deployments.

Consequently, a commercial 1 MW mini-grid is being developed at the Vametco mine, in the North West, including 2.5 MW of solar photovoltaic and a 1 MW/4 MWh VRFB as a funded independent power producer.

The grid connection and geotechnical studies have been completed, while an environmental assessment and procurement have started.

This is according to a session hosted at the 2020 Investing in African Mining Indaba by vertically integrated vanadium producer Bushveld Minerals, during which the company also highlighted growing demand from VRFB for stationary energy storage applications.

Further deployments this year include participating in the 2 000 MW energy storage allocation under South Africa’s Integrated Resource Plan 2019, as well as other African projects in the World Bank’s 17.5 GWh energy storage roll-out programme.

Bushveld Energy CEO Mikhail Nikomarov says the company also aims to advance the VRFB investment platform and identify further VRFB companies for investment this year.

“Our strategy is to ensure that we are not the only company funding the development of these companies. It is very much about bringing in other capital from other investors.”

Further, Bushveld Energy is investigating the business case for South Africa-based VRFB assembly, with Nikomarov highlighting that the company believes “there is good economics for local assembly”.

Another priority this year is the advancement of the construction of Bushveld Energy’s vanadium electrolyte plant to supply local and international VRFB projects, together with the Industrial Development Corporation.

The company also seeks to implement additional, larger electrolyte rental contracts. The feedstock for electrolyte manufacturing will be supplied by Bushveld Vanadium’s integrated mining and processing plant Vametco, which is expected to achieve a production target of between 3 000 t and 3 200 t of vanadium this year at a cash cost guidance of $17.20/kg to $17.70/kg of vanadium.

Bushveld Minerals CEO Fortune Mojapelo says the company intends to be the leading primary vanadium producer globally with more than 8 400 t/y of vanadium production in the medium term.

In pursuit of this goal, Bushveld Vanadium aims to complete the definitive feasibility study for its Limpopo-based Mokopane project in the second half of this year. The mining right for Mokopane was executed in January.

Owing to its large mineral reserves, the project will be a primary source of feedstock for the company’s Vanchem processing facility, which currently has sufficient third-party ore.

Officially acquired in line with Bushveld’s growth strategy in November last year, Vanchem has a production target of between 960 t and 1 100 t of vanadium this year.

Bushveld Vanadium intends to progress the facility’s refurbishment programme and finalise its expected capital expenditure plans and ramp-up profile this year.

The 2020 production cash cost for Vanchem should be provided in the first quarter’s operational update.

Supply and Demand

Mojapelo notes that robust growing vanadium demand is underpinned by the steel market, which is driven mainly by regulations in China and emerging market developments.

China has been a net vanadium importer in recent months, as a result of the increased intensity of vanadium consumption, according to current data from discussions with traders and research companies.

However, Bushveld Minerals says it is mindful of the potential impacts of the Coronavirus on the country’s vanadium imports.

Despite strong demand for the metal, Mojapelo stresses concentrated and constrained supply, dominated by co-production that is restricted by a subdued steel market outlook and capped upside capacity.

Supply is further inhibited by a decline in production by stone coal producers, as production is uneconomical at current prices; a limited greenfield supply outlook; and the incentive to substitute vanadium with ferroniobium being significantly diminished at current prices.

“Market fundamentals remain attractive with existing primary vanadium producers best-suited to deliver new supply,” says Mojapelo.

With a primary resource base of about 550-million tons, grading 1.58% to 2.02% vanadium oxide, Bushveld Minerals owns two of the world’s four existing primary vanadium production processing facilities, with capacity to scale up production significantly.

  • [Editor:tianyawei]

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