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Thanks Stodgy and thanks again Pdub for the carefully selected and relevant quote. Just to add to what I said last night, I agree that statement can help us to formulate some outline assumptions - it is indeed just the sort of help I was hoping for - much appreciated - many thanks indeed for your time on this. Ev.
Thanks Stodgy. Sorry about that typo.
In Pdub,s post quotes Mikhail saying extremely attractive , actually said extremely active,not been smart,but slightly different.
Hi Pdub, many thanks. I thought it was an interesting topic to discuss as it shines a light on an important area of expansion - I must admit that some of the defensive replies made me more persistent than I might otherwise have been(!!) but I don't think anyone invested should have conerns about analysing BMN's strategy - everything I know if it looks extremely solid - I was just seeking help on a particular point where I'd got stuck. Thanks for all of your efforts, Ev.
...still can't say I've read the 172 pages [sorry]...but Invinity doc on page 22 reiterates the REDT/BMN RNS of 9 March in which a special vehicle is set up to which BMN provide the Vanadium and Invinity provide funds for electrolyte production.
What I hadn't spotted when I last read it [many thanks Alfa for the pointer] is that it goes on to say "The Company has also agreed...to grant Bushveld aright of first refusal to supply vanadium products..." Interestingly that wasn't in BMN's own RNS on the topic.
The first bit is the part where others have suggested Oxchem [or other outsourced provider] would be involved... but the second is intriguing in relation to my question...without actually answering it. Clearly there's an implication that "products" could mean electrolyte, which would be a very positive answer to the question. I'd still really like to find a more solid answer though [in terms of public statements made] - I do imagine it exists but I haven't found it. Any help still much appreciated. Ev.
Apologies for double post
Evidently I see you are being very persistent with this question of geographical reach by BMN. I have been invested here for some 6 1/2 years and consider myself reasonably knowledgable about the company. In my opinion no one can definitively answer the question that you keep asking. However I will try to shed some light on this and hope that you then have enough information to be satisfied.
BMN’s global reach is and always will be as a supplier of vanadium and eventually perhaps vanadium chemicals and electrolyte. They will also have a global impact through their investments via the VIP platform (as we have already seen with Enerox, Avalon and Red), though I don’t believe at this tome that it is their plan to takeover any of these companies. As far as BE projects are concerned it is no secret that the focus will be on projects in South Africa and elsewhere across the African continent.
I offer you this quote from the same interview as I referenced earlier in the evening. Read it carefully as it is from FM / MN and clearly outlines their vision:
“Now I want to be honest we are not going to develop every single vanadium project every vanadium battery project in the world but if it's in Africa then it's extremely attractive. If it's somewhere in let's say Australia yes we are probably not involved in the development, but we may be supplying vanadium, electrolyte, possibly having equity stake into the company that invested there. Possibly having a stake into the rental product company that is supplying electrolyte for rental. So there's a lot of different ways and it can be extremely attractive. I don't know who is getting 6 ways to make money on one project. To some there might be only 2 or 3. But in either case it's more than just vanadium and that's what integration allows us to do."
Perhaps that quote more than any other that I am aware of indicates exactly where BMN intend to operate.
If you are still not satisfied then I suggest that rather than asking others to give you the benefit of their hours and hours of research you do some yourself and feed that back to us.
Hope that helps.
(The interview was in November 2019)
Evidently I see you are being very persistent with this question of geographical reach by BMN. I have been invested here for some 6 1/2 years and consider myself reasonably knowledgable about the company. In my opinion no one can definitively answer the question that you keep asking. However I will try to shed some light on this and hope that you then have enough information to be satisfied.
BMN’s global reach is and always will be as a supplier of vanadium and eventually perhaps vanadium chemicals and electrolyte. They will also have a global impact through their investments via the VIP platform (as we have already seen with Enerox, Avalon and Red), though I don’t believe at this tome that it is their plan to takeover any of these companies. As far as BE projects are concerned it is no secret that the focus will be on projects in South Africa and elsewhere across the African continent.
I offer you this quote from the same interview as I referenced earlier in the evening. Read it carefully as it is from FM / MN and clearly outlines their vision:
“Now I want to be honest we are not going to develop every single vanadium project every vanadium battery project in the world but if it's in Africa then it's extremely attractive. If it's somewhere in let's say Australia yes we are probably not involved in the development, but we may be supplying vanadium, electrolyte, possibly having equity stake into the company that invested there. Possibly having a stake into the rental product company that is supplying electrolyte for rental. So there's a lot of different ways and it can be extremely attractive. I don't know who is getting 6 ways to make money on one project. To some there might be only 2 or 3. But in either case it's more than just vanadium and that's what integration allows us to do."
Perhaps that quote more than any other that I am aware of indicates exactly where BMN intend to operate.
If you are still not satisfied then I suggest that rather than asking others to give you the benefit of their hours and hours of research you do some yourself and feed that back to us.
Hope that helps.
(The interview was in November 2019)
Ok, no probs - have given you a follow just now in case you'd like to follow up (but no worries if not).
Revisiting the Invinity admission doc now as suggested... but obvs if you can point me at the reference to the specific point on geographic strategy of BMN's vertical integration that would be awesome. Bushveld Perspective seems all about getting the detailed research right - my question is very much in this spirit. Some replies above sound (in my view) unnecessarily defensive - I had thought it was a question that would help not hinder valuation by shining a light on particular expansion opportunities. Thanks in advance for any help, Ev.
Evidently - everything I can discuss can be discussed here.
Hi Alfa, I've really appreciated all of your analyses on here BTW...have been following for some time. Re: Invinity admission doc - the truth is I scan read it when it came out but will certainly go back to it. I'd also read many REDT/Avalon docs previously. BTW I was seeking to clarify a detail with you guys who obviously spend more time pouring over the docs than me - certainly I was't trying to claim any superior knowledge here. Do you mind if DM you via the Bushveld Perspective Twitter [or some other means - I don't have LSE premium as yet ] ?
Evidently, have you read the Invinity admission document ?
Thanks HaleSpur - indeed my intention was to seek help from anyone who may have spent more time on this than me - hopefully that is part of the role of this community in helping one another. Are you able to respond to the point about which geographical markets the plant is targeting and where that is stated [presumably stated somewhere - I just haven't found it yet] ? Many thanks in advance, Ev.
Hi Evidently no offence intended , but I think you should go back to reading every single RNS on this site for the last few years like I have done, before you start thinking about projections about vertical integration.
You can't make any projections with significant holes in your current knowledge such as not knowing about there being an electrolyte plant being built and that Invinity does not produce electrolyte.
Then I think those with more knowledge than myself will probably help, otherwise you aren't helping yourself. GL
Thanks HaleSpur. The UK eletrolyte point is based on replies I received to my earlier question (mid-March), with some here suggesting it likely that REDT (as then was) would work with Oxkem [Berkshire, UK] to put the supply chain in for the electrolyte step - i.e. at this point in the UK BMN are not operating as an integrated supplier - though I am very willing to believe the intention is that they will become an integrated to the UK - and should be valued on the basis of being integrated - particularly if we can find statements describing how they see their role in future European supply chains.
Well indeed Knuttie. The notion of vertically integrated clearly has a particular definition as far BMN's RNS statements go. My post was meant to be constructive for me and others researching here - it seems that the more precise we can be about the scope of the vertical integration the more accurate our projections. Any help much appreciated.
Yep agree Knuttie we don't make concrete and Invinity don't make electrolyte in the UK.
We don’t make any concrete?
Hi Pdub, many thanks for the reply - yes I totally agree - I want to make sure that any time I update my valuation of BMN it's based on statements that have been made, not on speculation. The statements make absolutely clear that we should value BMN based on not only the global vanadium market but also vertical elements of the energy storage value chain in some geographical territories. I am exploring the extent to which we can identify which elements of the chain and which territories - hoping others are kind enough to share references to statements if they have them. For SA this question is easy to answer - BMN clearly has the whole chain going on, right through to production of VRFB themselves. That's not speculation - it's clearly written in RNS statements. For rest of Africa, Europe, North America the intent is at least to supply Vanadium to the electrolyte plants operated by others, and perhaps do more of the chain. I was asking if others who may have done more research than me can point me to concrete statements made about the scope of that? And what of China and India? Just a Vanadium supplier or something more? Thanks in advance for any assistance. Ev.
Evidently I firmly believe it is best to listen to what the CEOs say rather than speculate. We know that BMN is a significant miner and processor of vanadium. To continue downstream to vertical integration here is what they said in an interview in November about Bushveld Energy. It is fairly clear what their goals are.
““Bushveld Energy, you get a lot of coverage online for your expertise, so I hope that you can share some of that with us today. Can you tell us again, just a little summary of what BE is and what you think it can become in the context of BMN?”
MN “Sure, I think what it can become is something even larger than what we are doing on the mining side, I’m not going to put a timeline on that, but in terms of upside that is possible. But that is where the market is going. It is just a question of how we get there. In terms of what BE does itself, think of it as three verticals, one is around electrolyte that is a specific type of vanadium chemical, it’s the piece that stores energy within the batteries. We are building a facility in East London. We are doing it together with the IDC, we’ve got our environmental approvals clearance in September, we just went out to tender for the construction of the facility there."
"The second thing that we are doing in the electrolyte is that we’ve created a rental product where we’ve taken advantage of the fact that the (electrolyte) doesn’t degrade through use in the battery, it can be fully recovered to be deployed in another battery or converted very cheaply into Ferrovanadium again. So that is the second thing that is going to be more of a financial product.
The second part within what BE does is around manufacturing. We envision there being a facility in SA for assembly of VRFB’s as the market grows. More recently what we’ve started doing is work with the vanadium battery original equipment manufacturers. There is a number of ways with which we work with them, one of the things we’ve announced is investment and I can talk about that further. We definitely feel that these companies – there are some good ones out there, and they are going to generate a lot of upside in their value as the stationary storage market grows, and as we see this trend towards longer duration where our technology is a lot more powerful.
The last piece is around deployments, so we do project development. We’ve got a team that looks to deploy energy storage sometimes coupled together with renewable energy, sometimes on it’s own. And really, that’s quite an exciting opportunity, especially on our continent where the need for energy is very high, but the provision of it is very unreliable.”
Many thanks Halespur, much appreciated. Yes I think you're absolutely right to refer to the 7th Nov RNS which describes the electolyte plant. Is it your understanding that this aims to supply electrolyte for rental to territories outside of South Africa (and at least Africa)? What is your reference for that? Is there a statement to this effect? I haven't yet found it.
RK thank you, your positive sentiments are I'm sure appreciated by many investors here. Just to be clear on our definitions, by "vertically integrated" I understand us to mean "doing more than one step in the value chain", and when interpreted in the context of VRFB I understand that we mean BMN will do not just the mining step but the electrolyte rental step, in at least some territories. I hope this is how you understand "vertically integrated" also. I find acquisitions is the interesting point in what you have said. I fully see how funding an 8% stake in Invinity does help build the market for VRFB [and therefore drives demand], but I don't yet know in what way this meets the specific aim of vertical integration [i.e. doing the electrolyte rental step] outside of SA. I'm not denying that such a strategy is likely to exist, I'm just saying I don't know what it is. If Halespur is right and BMN intend to use SA plants to produce electolyte for European and North America rental, what becomes of the work done by Invinity on UK-based eletrolyte production? On the other hand, if the 8% is just a build-up to acquisition, why would there be an attempt (as Halespur suggests) of doing the processing in SA, if BMN intend to acquire European/American facilities to do the same thing?
Evidently, the whole company stratergy is to build a vertically integrated business and go back to 2017 when we didnt even own Vametco. Look at progress and what the business is doing.
Started with the business from Iron Ore mining from Mokopane acquisition. This then quickly changed direction towards vanadium, they acquired Lumur which allowed them to acquire a right to the Brits mine which was next to Vametco, them the took a share in Vametco, and over a very short time took over complete ownership. Having completed thie aquisistion they set about impriving the mine and its efficiency with some strong investments just at the time when the vanadium price started to rocket upwards. This resulted in a huge cash reserve in 2018 which they used to set up the next stage to plan to build the electrolyte plant in East London, but at the same time, they had an opportunity to buy a second brownfield site Vanchem. This has the capacity to take ore from Mokopane when the mine opens. It can also take ore from Vametco. The total capacity of the two sites will reach 8400 mtV by 2023/24.
Now Bushveld Energy is the kingpin to next-level growth. The business is the fundamental foundation is supplying the steel indiusty but the massive upside growth in energy storage has been the known sleeping giant. Bushveld know to aid this market they could use influence to make this opportunity succeed. The way is to build partnerships and even acquisitions in this field, like Enerox and Invinity (RedT/ Avalon merger) to grow the market in the US and Europe as well as the growing customer base.
Add to this the potential huge African market for renewable energy and storage, with electrolyte produced in SA and the completion on the vertical model by assembling VRFB in SA in the years ahead. This means mine to the product under one business umbrella. Does that help explain in as simple terms as possible that this is vertically integrated?
Revenue streams are:
V203, V205, FeV, Nitrovan, Vanadium Chemicals, Vanadium Electrolyte, Vanadium Leasing, VRFB partnerships with part ownership, Energy Project management, Mini-grid partnerships, part ownership of Afritin Mining and 100% Ownership of a power company in Madagascar - Lumur.
The current market cap and share price for this business have no reflection of what it is truly doing and the income it has been generating and will generate.
Later this month we will hear the Q1 2020 news from Bushveld and this is likely to have pushed record production before the current maintence period whilst the plant is on CV shut-down
Evidently, I hope this helps.
Cheers, RK
sorry typo
Short answer, the $10m electrolyte plant is due to be built this year and then it can supply to its hearts content and worldwide.
Until then they will need to use an electrolyte partner for the small scale projects but it is still profitable supplying vanadium. This in turn will in turn take Vanadium out of the steel market.
Please refer to the BMN RNS page to view progress on this as it will show the approvals over the year. GL
...figuring out exactly how "vertically integrated" BMN intends to be?
I've asked a similar question on here before, and got helpful thoughts. It seems worth revisiting in the wake of the Invinity/REDT RNS. I agree with all who are saying the company should be valued at more than a Vanadium miner, due to the grander vision of a vertically integrated supply chain into battery storage.
But (as the helpful answer I got last time about REDT illustrated) there is a considerable difference between being the electrolyte rental provider in SA (via the Vanchem processing facility) and being an electrolyte rental service globally.
At present the Invinity plan for UK does * not * include BMN ownership of electrolyte production [the helpful answer from last time suggested a likely outsourcing to a UK provider].
So which is it? Vertically integrated in SA and simply a low-cost Vanadium supplier outside SA? Or vertically integrated global electrolyte rental? If global, how do BMN intend to get there?
I think this company's future is exciting. To be clear my question is not about whether it will be much bigger than it is today, more about how much bigger and how we should value that scale-up.
All thoughts/comments welcome.