Bushveld Minerals warns on tough start to year

Bushveld Minerals, which is building a plant in East London, has warned its full-year output would be at the lower end of its target and even that number could be missed after a tough start to the year.

Aim-traded Bushveld, one of the world’s big sources of primary vanadium, has two 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, storing large amounts of power.

The work under way in East London for the electrolyte plant will use ’vanadium from the company s inland plants.

Bushveld has started placing orders for long-lead items that take manufacturers time to make. Plant construction will start before July and the plant should be commission in the second half of 2022.

The project will cost R217m. The Industrial Development Corporation is providing part of the funding.

Bushveld advised its full-year output would be at the bottom end of the 4,100 tons and 4,350 tons guidance it gave at the end of the previous briefing “although risks to this guidance exist”. It generated 3,600 tons of vanadium the year before.

Bushveld plans to grow output to 6,800 tons by 2025 and it has funding in place. If it secures more funding it could grow production to 8,400 tons 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 35 days for repairs.

The risks arose from difficulties in ramping the Vametco plant near Brits, North West, back to steady state output after it closed for maintenance during Q1, as well as keeping the plant performing consistently.

The group’s output for the three months to end-march fell nearly a quarter to 688 tons year on year, while sales of 788 tons were 27% lower.

Bushveld is testing a large battery at Eskom as the government wants battery storage to form part of its energy strategy.