LONDON (Alliance News) - Bushveld Minerals Ltd on Monday said it has signed a cooperation agreement with South Africa's government-owned development fund to investigate the economic viability of manufacturing and using vanadium redox flow batteries in the country.
Bushveld will work with the Industrial Development Corp (IDC) to determine the viability of utilising South Africa's vast vanadium resources to manufacture batteries to then be used to help alleviate the country's lack of infrastructure, mainly the poor coverage offered by its power grid.
"Africa's insufficient power infrastructure and rapidly growing electricity demand create a unique environment for immediate, mass-scale adoption of energy storage across a variety of use cases. The agreement with IDC is an important step for Bushveld Energy, and we are very pleased to add a major local partner with significant resources and expertise in building successful, long term businesses in South Africa," said Fortuna Mojapelo, chief executive of Bushveld.
The IDC is a government-owned financial institution which provides funds for the industrial development of the country. The organisation approved ZAR11.50 billion worth of funding to companies in 2015, equal to around USD1.00 billion, across various sectors.
Energy storage is a growing market and has seen major developments occur in North America, Europe and Asia, but Bushveld believes South Africa offers an opportunity due to its power set-up, combined with its vast vanadium resources, with the country being one of the primary producers and exporters of the commodity.
Bushveld is already in the vanadium sector through its project that lies in one of South Africa's most important vanadium-producing regions, which is responsible for 26% of the world's supply.
The company's wider portfolio contains projects in South Africa focused on iron ore, titanium and tin, and also has an interest in a company that is involved in a coal project in Madagascar.
Vanadium redox flow batteries can help tackle numerous power problems as they can allow energy to be generated and then stored to be utilised when it is needed.
For example, one of the major hurdles of renewable energy is that the power generated must be used immediately, causing some energy to be wasted or a lack of energy supply when renewable sources can't generate enough power, such as when solar power suffers from a lack of sun or turbines from a lack of wind.
Africa as a whole is a prime area that could benefit from energy storage as most nations on the continent are less than half covered by a power grid, meaning many residents and businesses rely on off-grid power solutions, including the use of diesel generators.
The set-up of South Africa and the wider continent makes it the "logical base" for manufacturing vanadium redox flow batteries, according to Bushveld. This will help to support other natural resource sectors by offering a power solution to process plants used in the mining industry, a key part of the South African economy.
Bushveld signed a separate cooperation agreement earlier this year with US-based UniEnergy Technologies that also will look at potential battery opportunities in South Africa, aiming to develop a strategy to create a vanadium "value chain" in the country.
Under the new cooperation agreement, Bushveld and the IDC will commission a feasibility study to assess the viability of vanadium redox flow batteries and the associated costs within South Africa. The study will try to identify potential partnerships at home and abroad to support the roll-out and local manufacturing of the batteries.
The pair have agreed to establish two verification sites of up to 1.0 megawatts each within South ~Africa to demonstrate the performance of vanadium redox flow batteries and the use in commercial and utility applications.
Bushveld said it has started to prepare to carry-out market studies and the technical evaluation for local manufacturing of vanadium electrolyte and vanadium redox flow battery systems.
If Bushveld can progress its strategy and become a player within the battery market, then it will join the likes of fellow London-listed RedT Energy PLC, which is also one of the companies pursuing opportunities using vanadium redox flow batteries with numerous systems being trialled across the globe.
Bushveld shares were trading up 1.6% to 2.01 pence per share on Monday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Bushveld Minerals (BMN)