【Ferro-Alloys.com】

 

Bushveld Minerals Limited (AIM: BMN), the AIM quoted, integrated primary vanadium producer and energy storage provider, with ownership of high-grade assets in South Africa, ("Bushveld"), is pleased to provide its third quarter and nine months ending 30 September 2020 ("Q3 2020" and "9M 2020") operational update.

 

Bushveld Vanadium

· Group production for Q3 2020 of 1,019 mtV   was 31 per cent higher than Q2 2020  due to the lifting of the nationwide lockdown, which occurred in Q2 2020.(Q2 2020: 778 mtV)

· Group production for 9M 2020 of 2,667 mtV was 37 per cent higher than 9M 2019 , as a result of the inclusion of the Vanchem processing assets for the full nine month period. (9M 2019: 1,953 mtV)

· Group sales for 9M 2020 of 2,987 mtV1 was 74 per cent higher than 9M 2019 (9M 2019: 1,719 mtV), as a result of the inclusion of sales from Vanchem.

· Severe weather conditions at the beginning of November 2020 resulted in an unexpected longer than normal power outage at Vametco, impacting the refinery section.

· Despite this incident, and assuming there are no further stoppages, the Group still expects to meet the lower end of its full year production guidance range of between 3,660 mtV and 3,950 mtV.

 

Vametco

· Production for Q3 2020, in the form of Nitrovan and Ferrovanadium, was 725 mtV, 29 per cent higher relative to Q3 2019 (Q3 2019: 561 mtV) as a result of reduced commissioning and ramp-up time following the tie-in of the Kiln-Off Gas compared to the 2019 maintenance shutdown.

· Production for Q3 2020 was 28 per cent higher than Q2 2020 (Q2 2020: 566 mtV) due to the lifting of the nationwide lockdown which occurred in Q2 2020.

· Production for 9M 2020 was 1,942 mtV, this is in line with the production from 9M 2019 (9M 2019: 1,953mtV), despite the impact of the nationwide lockdown and changes in work arrangements, in line with Covid-19 guidelines.

· Production cash cost (C1) for Q3 2020 was US$18.10/kgV, a 12 per cent decrease relative to Q3 2019 (Q3 2019: US$20.60/kgV), as a result of a weaker ZAR:USD exchange rate.

· Production cash cost (C1) for 9M 2020 was US$17.50/kgV, an 11 per cent decrease relative to 9M 2019 (9M 2019: US$19.70/kgV), due to a weaker ZAR:USD exchange rate.

· Despite the recent power outage, assuming there are no further extraneous incidents,  Vametco expects to meet the lower end of its 2020 production guidance range of 2,700 mtV to 2,850 mtV and the higher end of its production cash cost (C1) guidance of between ZAR295/kgV and ZAR300/kgV (US$17.50/kgV and US$17.90/kgV).

 

Vanchem

· Production for Q3 2020 was 294 mtV, 39 per cent higher than Q2 2020 production (Q2 2020: 212 mtV) due to the lifting of the nationwide lockdown in Q2 2020. Production for the 9M 2020 was 725 mtV.

· On track to meet 2020 production guidance of 960 mtV to 1,100 mtV and production cash cost (C1) guidance of between ZAR310/kgV and ZAR320/kgV (US$18.40/kgV and US$19.0/kgV).

 

Bushveld Energy

· During the period, the acquisition of Enerox GmBH as part of the investment consortium, was completed.

· On 11 November 2020, the Company provided an update on the Vametco Mini-Grid project being developed at the Vametco vanadium mine comprising of 3.5 megawatts ("MW") of solar photovoltaic ("PV") (previously 2.5 MW) generation and 4 megawatt hours ("4MWh") of vanadium redox flow battery ("VRFB") energy storage. Abengoa was appointed to provide Engineering, Procurement and Construction ("EPC") of the project, including the integration of the solar and energy storage systems. Thebe Investment Corporation was announced as a strategic equity partner in the development and funding of the Mini-Grid project.

· In addition, Bushveld announced signing a contract for electrolyte rental with Pivot Power, part of EDF Renewables, under a partnership with Invinity Energy Systems.

 

Vanadium and VRFB Markets

· Increased Chinese demand during Q3 2020 resulted in price disparities between China and the rest of the world for a short period. This de-synchronisation between China and the rest of the world translated into temporary price premium for vanadium products. As a result, Chinese imports surged and in turn inventory levels increased. The vanadium prices in China have since retracted to similar levels seen across other regions due to increased supply of vanadium products.

· The increased infrastructure spending in China has resulted in higher steel production, supporting vanadium demand, with China been a net vanadium importer during the months of July, August and September 2020. 

· The weak demand in Europe as a result of further lockdown measures being introduced, as well as constrained demand in the United States, is expected to continue until the end of 2020.

· However, we expect increased deployment of  demand, as governments focus on accelerating the energy transition to a low-carbon energy future, which will increase vanadium demand.

· The London Metal Bulletin Ferrovanadium price averaged US$25.2/kgV in nine months ended 30 September 2020 , 47 per cent lower than 9M 2019 (9M 2019: US$47.70/kgV). The spot price was US$23.30/kgV as at 30 October 2020.

 

 

Bushveld Vanadium

Bushveld has one of the largest, high-grade primary vanadium resource bases in the world. The Company's vanadium resource base currently consists of three mineral assets, Vametco, Brits and Mokopane, and its processing facilities consist of Vametco and Vanchem, which are all situated in South Africa.

 

Bushveld Energy

Deployment

Hybrid Mini-grid project

· In 2019, Bushveld Energy announced plans for the development of the hybrid solar and storage mini grid co-located at the Vametco mine and processing facility. While the mini-grid will supply just under 10 per cent of the mine's electrical energy consumption at any one time, the project will demonstrate the technical and commercial capability of hybrid mini-grids using solar PV and VRFB technology. Technically, the mini-grid system will be able to operate independently or jointly, either as standalone systems or as a fully functional mini-grid installation.

· In addition, the mini-grid system, will remove over 5,700 metric tonnes of CO2 emissions per year (and nearly 114,000 tonnes over the life of the project), thereby reducing the carbon footprint of Bushveld's mining and processing operations and contributing towards South Africa's low emission development strategy.

· Vametco will supply approximately 25 tons of vanadium in the form of oxide for the VRFB. Enerox GmbH the VRFB developer and manufacturer owned by an investment consortium which includes Bushveld, will supply the VRFB and electrolyte, and Abengoa will supply the solar PV unit, install and integrate the system at the Vametco mine and processing plant. In addition, provide maintenance for the facility post-commissioning.

· The project is part of Bushveld's strategy to demonstrate both the superior technical merits of long duration VRFB systems when paired with renewable energy, while providing a commercial return to its investors.

 

Electrolyte rental

· On 7 September 2020, the Company announced that it had formed a special purpose company in partnership with Invinity Energy Systems plc ("Invinity"), named Vanadium Electrolyte Rental Limited ("VERL"). VERL's purpose is to provide a vanadium electrolyte rental option to Invinity's customers. In addition, Bushveld announced that VERL had signed a contract for electrolyte rental with Pivot Power, part of EDF Renewables. Under this contract, VERL will hold, and rent to Pivot for a period of ten years, the electrolyte in Pivot Power's five megawatt-hour flow battery, supplied by Invinity and to be delivered to Pivot Power's project at the Energy Superhub Oxford. 

 

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