Bushveld Minerals – The Future of Vanadium

Bushveld Minerals show us how vanadium is going to play an increasingly important role in our future.

Vanadium is a silvery grey, malleable metal that you may not have heard of, but which already plays a vital role in all parts of your life. It is vital to the production of everything from steels and other alloys to batteries. It’s also the core of Bushveld Minerals’ business.

Bushveld Minerals is a low-cost, vertically integrated primary vanadium producer, one of only three operating primary vanadium producers. Bushveld produces approximately 3,000 metric tonnes of Vanadium per annum, approximately 3% of the entire global vanadium market.

“Our target is to organically grow production to more than 8,400 mtV p.a. in the medium term,” explains Bushveld Minerals’ CEO, Fortune Mojapelo.

Bushveld Minerals owns a diversified vanadium product portfolio serving the needs of the steel, energy and chemical sectors. The company participates in the entire vanadium value chain through its two main pillars: Bushveld Vanadium, which mines and processes vanadium, and Bushveld Energy, an energy storage component manufacturer and project developer which is focused on vanadium-based energy storage systems called Vanadium Redox Flow Batteries or VRFBs.

Bushveld Minerals boasts large, high-grade opencast deposits, with a base of approximately 550 Mt, grading of 1.6 to 2.0% V205 in-magnetite, among the highest in the world. The business’s resources offer significant growth potential, and collectively, the Vametco and Vanchem plants provide Bushveld with the potential for a flexible and scalable low-cost production platform, which will enable it to maintain a competitive position in the vanadium market.

“We have enough processing capacity to almost triple our production from roughly 3,000 mtV to more than 8,400 mtV,” says Mojapelo. “Through Vametco and Vanchem we produce Nitrovan, ferrovanadium, vanadium oxides and vanadium chemicals. We have the most diverse vanadium product portfolio.”

The company’s low-cost, scalable production base also allows it to build a pioneering downstream vanadium-based energy storage platform and thus enablinge Bushveld Minerals to play a key role across the VRFB value chain.

Battery Powered

Demand from the battery storage sector could in turn boost demand for vanadium, and Bushveld Minerals is ready to take advantage of that opportunity.

“90% of vanadium is consumed by the steelmaking industry as an alloy-making element. While that has been good for almost a century, any market will benefit from diversified demand profile,” Mojapelo tells us. “To give you some perspective on that market and how attractive it is, in 1980, 10% of the energy consumed worldwide was electrical. Today that figure is 20%. By 2050 it’s expected to be 45%. We’re seeing this big phenomenon of the electrification of everything from electric cars to personal devices. At the same time, we’re seeing a big push towards renewable green energy-driven among other things – by climate change concerns. The whole planet is changing its agenda and the traditional energy structure with the utility at the centre is facing a lot of disruption. We’re seeing more distributed energy systems that don’t need the utilities infrastructure to supply electricity for themselves.”

Bushveld states that, Bloomberg New Energy Finance predicts a 122-fold increase in demand for stationary energy storage alone by 2040, attracting 662 billion dollars in capital. But it’s not simply easy money.

“We recognised that to capture a meaningful share of the market we would need to overcome challenges in the availability of vanadium in terms of supply, and the cost of vanadium compared to other batteries,” Mojapelo acknowledges. “The supply is important because there is a large battery being built in China, 800Mw hours using 400,000 tons of vanadium which represents 4% of global vanadium production and that’s just one project. If you look at the forecasts, we should see something like 100Gw hours in deployment. Even if you assume only 10-20% penetration, the amount of vanadium necessary to support that is 50-100% of global vanadium production last year. So we’ll need a lot of vanadium. Fortunately, there is plenty in the ground, we believe there’s more than enough vanadium to support this increase in demand.”

The second challenge is the cost. Vanadium accounts for 30 to 40% of the price of a system depending on the price of vanadium at the time. 

“It’s one of the most volatile commodities from a price perspective which doesn’t help when you’re trying to bring the cost of a product down progressively,” Mojapelo admits. “So we’ve built a low-cost production base while integrating vertically upstream and downstream, to solve cost volatility.”

Keeping Safe

During 2020 the main focus for Bushveld Minerals has been to manage the impact of the COVID-19 pandemic on the business, primarily to prioritise the safety of its employees and host communities by putting in place measures to contain the spread of the virus in the workplace.

“We recognised the gravity of the COVID-19 pandemic early and moved quickly to take all necessary measures to create awareness, minimise transmission risks and establish intervention protocols for potential cases,” Mojapelo says. “We have changed the way we operate and amended shift patterns to adapt to the need for increased social distancing and to adhere to COVID-19 guidelines.”

At the same time, Bushveld has had to implement cash preservation measures by reducing its spend only to critical capex to manage near term liquidity while preserving the long term sustainability of the assets.

“These measures have resulted in the deferment of some of our growth projects until the operating conditions stabilise,” Mojapelo tells us.

A Vision for the Future

Through this crisis, Bushveld’s people have been not only its top priority but its most valuable resource.

“Bushveld Minerals employs exceptional people with outstanding capabilities and great potential in all areas of our business. Our business success is underpinned by having an inclusive culture which reflects the diversity of our employees,” Mojapelo says.

This new head office marks the beginning of Bushveld Minerals new five-year growth strategy that will ultimately lead to a production platform of over 8,400 mtVp.a. This strategy includes Vametco’s Phase Three expansion project to achieve a steady-state production run-rate of 4,200 mtVp.a. in 2025, Vanchem’s three-phase refurbishment programme to achieve a production of over 8,400mtV in 2025. Bushveld Energy, meanwhile, is set to become a leading energy storage player.

“We are very optimistic about the future of vanadium,” Mojapelo tells us. “As the world emerges from COVID we will see an uptick in the construction space and greater demand for vanadium driven by standards put in place by markets such as  China, to drive towards higher quality strength steels, alongside continuous growth of the energy storage sector on the back of the continual push to decarbonise energy.”

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