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Real Economy News in Real Time
R/€ = 18.99 Change: -0.04
R/$ = 16.76 Change: 0.01
Au 1808.13 $/oz Change: 7.53
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Bushveld retains vanadium production guidance

23rd June 2020 BY: Martin Creamer
Creamer Media Editor

JOHANNESBURG (miningweekly.com) – While Vametco and Vanchem’s production were disrupted by the 35-day nationwide Covid lockdown, London Aim-listed Bushveld Minerals is retaining the previously announced guidance, provided there are no more pandemic stoppages.

Bushveld Minerals is a vertically integrated primary vanadium producer with a diversified vanadium product portfolio, currently producing at a rate of 3 000 metric tonnes of vanadium (mtV) a year, with plans to grow its production to more than 8 400 mtV a year in the medium term. 

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The company was able to report solid 2019 earnings of $32.6-million, with after-tax profits of $69.2-million helped by a one-off gain on the acquisition of the company’s second processing facility, Vanchem, which closed near the end of the year, after it was valued higher than its eventual purchase price.

Bushveld Minerals’ portfolio of companies includes Bushveld Vanadium, which mines and processes vanadium and Bushveld Energy, which is a leading energy storage solutions provider and project developer exclusively focused on vanadium-based energy storage systems called vanadium redox flow batteries.

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Vametco is still expected to produce between 3 000 mtV and 3 200 mtV of vanadium at a production cash cost of between R257/kgV and R265/kgV and Vanchem at between 960 mtV and 1 100 mtV at a production cash cost of between R245/kgV and R260/kgV.

Of the 2020 capital expenditure (capex) expected of R135-million, R50-million will be spent at Vanchem, with R35-million on the completion of the kiln off-gas project in order to comply with environmental regulations and further increase kiln feed throughput, and R11-million on sustaining capital. Required for the Vametco Phase 3 prefeasibility study is R4-million to achieve a steady state production of 4 200 mtV a year.

At Vanchem, R85-million has been identified as critical capex required mostly in the second half of 2020.

Group production in the first three months of this year was 871 mtV, an increase of 34% compared with the first quarter of 2019, which was 649 mtV.

Group first-quarter sales of 1 080 mtV were more than double the sales of 508 mtV in the corresponding quarter of 2019. 

Bushveld Minerals is a vertically integrated primary vanadium producer with a diversified vanadium product portfolio, currently producing at a rate of 3 000 mtV a year, with plans to grow its production to more than 8 400 mtV a year in the medium term. 

Bushveld Minerals CEO Fortune Mojapelo and CFO Tanya Chikanza responded to analysts' questions during a conference call in which it was stated that most near-term demand drivers are poised to have a positive effect on vanadium prices.

Mojapelo stated in a release to Mining Weekly that Bushveld Minerals was continuing  to steadfastly execute on its strategy, outlined in 2014, of building one of the world’s largest low-cost and vertically-integrated primary vanadium platforms. 

He stated that following the completion of the acquisition of a 74% interest of Vametco, over the 2017/18 period, the company’s flagship asset was continuing to shine.

Production grew and costs came in below guidance estimates, despite notably lower vanadium prices compared with a year earlier.

“The acquisition of Vanchem is another significant milestone for the company, adding another brownfield primary processing plant to complement Vametco. With a 3-kiln configuration, and a product suite of vanadium pentoxide, vanadium chemicals, vanadium trioxide and ferrovanadium, the Vanchem acquisition has positioned Bushveld to own one of the broadest vanadium product portfolios in the world,” Mojapelo said.

Located conveniently with access to rail infrastructure passing close to the Vametco operations on the western limb and the Mokopane deposit on the northern limb of the Bushveld Complex, the Vanchem plant fitted, he said, seamlessly with Bushveld’s assets and provided the company with a flexible and scalable vanadium production platform.

Its current production of 1 000mtV a year was set to grow to more than 4 200mtV a year following a refurbishment programme.

Vanchem, he added, would play a key role alongside Vametco and Mokopane in establishing Bushveld Minerals as one of the most significant low cost primary vanadium producers globally.  

EDITED BY: Creamer Media Reporter
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