Bushveld warns on output target
Bushveld Minerals, one of the world’s big sources of primary vanadium, warned its full-year output would be at the lower end of its target of between 4,100 tonnes and 4,350 tonnes. Even that number could be missed after a tough start to the year.
Bushveld Minerals, one of the world’s big sources of primary vanadium, warned its full-year output would be at the lower end of its target and even that number could be missed.
AIM-traded Bushveld has two vanadium operations in SA as well as a potential mine. It is building an electrolyte plant in East London as part of its strategy to provide vanadium redox flow batteries for large electricity generators and users such as power plants or industrial sites.
Vanadium is used to make steel alloys and can play a role in renewable energy applications such as wind and solar electricity generation.
Bushveld advised its full-year output would be at the bottom end of the 4,100-4,350 tonnes guidance it gave at the end of the previous year, “although risks to this guidance exist”. Bushveld generated 3,600 tonnes of vanadium the year before. It plans to grow output to 6,800 tonnes by 2025 and has funding in place. If it secures more funding it could grow production to 8,400 tonnes in the same time frame.
Bushveld, which has stated an intent to list on the JSE, had a tough first quarter with its Vametco plant stopped for repairs. The risks arose from difficulties in ramping the Vametco plant near Brits back to steady state output after it was closed for 35 days of maintenance.
IMPROVE RELIABILITY
“We recognise Vametco has underperformed at times, but work such as the 35-day maintenance shutdown is expected to improve reliability and performance issues experienced in the past,” said CEO Fortune Mojapelo, adding there had been a period of normal production in the second quarter.
There was a five-day unprotected strike at Vametco in April by the Association of Mineworkers and Construction Union, which resulted in the loss of 65 tonnes of vanadium.
First-quarter production fell 40% year on year to 395 tonnes.
The Vanchem plant in Emalahleni is starting its first phase of refurbishment, which contributed to the subdued group production outlook. Vanchem had a strong start to the year, with output up 34% to 293 tonnes. The group’s output for the three months to end-March fell nearly a quarter to 688 tonnes year on year, while sales of 788 tonnes were 27% lower.
Bushveld is working on a definitive feasibility study at the Mokopane vanadium deposit and the plan is for it to supply the Vanchem plant.
Talks with nearby communities to access the deposit to conduct trial mining and taking large samples for test work are under way..
Ferrovanadium prices are trading at about $32/kg compared to an average of nearly $31/kg in the first quarter, which was higher than $26.50/kg a year earlier. Work is under way in East London for the electrolyte plant, which will use vanadium from the inland plants. Bushveld has started placing orders for long-lead items that take manufacturers time to make. Plant commisioning should be in the second half of 2022.