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So it is a no from me and instead I am staring down at that the words telling me that the company is "reviewing the timing and required investment" and I am seeing an accceleration of the process.

Ramp up and roll out teething problems aside, we are in my view looking at Phase 3 coming on line significantly ahead of the guidance "end of 2019," which lends itself very well to the use of conflicting quotes by the company previously, which said "during 2019."

But of course access to the cash flows brings more than just Phase 3, it brings access to the cash required to trigger and perhaps execute the brownfield acquisitions and expansions, that have been indicated for so long. infact many things have been indicated for a long time without much meat being added to the bones. The need to wait for the security of those cash flows is as storng an argument as any for why.

If i am right, then as I say, Q1 could, should, will, deliver one or two significant surprises to the BMN current master plan. Though perhaps they should not be such a great surprise after all, becasue as is always the case with BMN, we have been already been toldm, it is just that we have to think a lot depper into the words than many would perhaps appreciate.

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One does not make statements about being focused on "maximised production outputs" by delaying Phase 3 expansion.

I accept that the wording could lend itself to a slower roll out, given the news that production at Vametco has been previously been affected by issues with the feed. This also lends support to the use of the words "sustainably maximise production volumes." However, I do not believe that is what is being implied here.

The wording of the Q3 update states " the Company is reviewing the timing and required investment to expand production capacity to 5,000 mtV." Given the statements about access to cash flows, the use of inclusion of the words "required investment" lend themselves to a higher investment being made, otherwise why say it. The company has to date been very light on its use of figures for the expansion of Vametco, so why then suddenly include an indication of a reduction in investment, when you have already stated that "the Company expected to generate healthy cash flows."

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Placing my reserved outlook to one side and putting on my bullish cap on once more, I feel very strongly that there are one or two significant surprises coming our way this quarter and for the sport of being right, I am going to go there once more.

It centres around the wording that the company employed in the Q3 update.

"With the completion of most of the corporate action aimed at maximising Bushveld's ownership of Bushveld Vametco, the Company can accordingly now focus on ensuring maximised production output and efficiencies at Vametco."

I have talked about this before. It was the very same with FM in his interview with proactive in Oct 2018 when he answered the question of "what are the priorites for the rest of this year and into 2019?"

FM in answering that question started with the simplifaction of the corporate structure stating "access to the cash flows at Vametco was an important part."

Continuing to answer the question he goes on to state that "Phase 3 expansion at Vametco is commencing in earnest" as well as Brits and more importantly "we continually looking for brownfield assets". . . "continuing to do". . . "we are encouraged by what we see in the market."

That interview came 3 weeks prior to the Q3 update and the above quote, and a month or so after the Sojitz buyout was completed.

What all of those actions and quotes tell me very clearly is that the access to the cashflows is the key trigger that allows the thus far strongly indicated plans, to be implemented and perhaps accelerated.

It is key for me that FM stated that Phase 3 started "in earnest" shortly after Sojitz were removed from the picture. That makes perfect sense because that whole process is far cleaner without Sojitz in the picture, be it for valuation means or indeed purely the authorisation to expend the funds.

At this point it is important to remember that the BEE partner for Vametco was chosen by BMN, was financed by BMN, and is led by a long standing business partner of BMN. Therefore, with Sojitz out of the picture, 100% of Vametco is geared to the plans of BMN.

With that thought process in mind, let's go back to the Q3 update.

"While higher vanadium prices partially mitigated the impact of the production shortfall, with the Company expected to generate healthy cash flows, Bushveld intends to use this opportunity to sustainably maximise production volumes and drive operating costs down."

"As part of the operational improvement initiative, designed to enhance Vametco's productivity, the Company is reviewing the timing and required investment to expand production capacity to 5,000 mtV."

With Phase 3 having commenced sometime in Sept/Oct, there is for me no valid conclusion for the above statements, that does not involve accelerating the process by employing "access to the cash flows," when taking into account the full context of both the update, the October interview, and the timing of these events around the Sojitz

A thought or two i would like to repeat regarding the anticipated profitability of BMN in 2019.

Whilst vanadium prices may for a variety of reasons fluctuate, the supply deficit is clear. Nobody should be in any doubt about that when they talk about prices pulling back. Therefore, whatever happen in the market with such things as the trade war or the Chinese economy softening, it will always be temporary. At some point the V market is going to need more supply.

The producers best placed to achieve that are pure play producers. Of the 3 that effectively exist, Largo has already played it first card by adding 25% V205 production to its Maracas facility by June 2019.

Glencore has been very quiet and thus far done nothing to push its production higher.

That leaves BMN, who have already communicated very ambitious expansion plans with a view to taking production to 10,000 mtv.

The cash flows that I have described in my last post, demonstrate the ability to achieve that. Infact they are so strong that one could make an argument for all of the current plans being achieved without the need to further dilute shareholders unnecessarily.

So this isn't just a business that on paper can achieve £65m plus in profit. Once the actual plans of how the company will reach this target are published, there is a strong argument for the potential to be factored in far more strongly, and I fully expect that to be the case.

The Q4 update is for me has the potential to be a very important update, if the company decides to keep all of its vanadium production elements in 1 basket. It will set the tone and basis for 2019 and again the wording is pointing to something very significant.

Q3 Update quotes ;

"While higher vanadium prices partially mitigated the impact of the production shortfall, with the Company expected to generate healthy cash flows, Bushveld intends to use this opportunity to sustainably maximise production volumes and drive operating costs down"

"we are pleased to have commenced with Phase 3 of our expansion plan, which will increase capacity at Vametco to 5,000 mtV per annum". . . . "the Company is reviewing the timing and required investment to expand production capacity to 5,000 mtV."

"The Company continues to execute on its operational improvement initiative, to enhance Vametco's productivity and achieve maximum throughput."

Vametco resource "an updated Mineral Resource Estimate to be published in Q1 2019."

"All assay results are expected to be received by December 2018, and an updated Mineral Resource Estimate and Mine Works Programme are expected once all Quality Assurance Quality Control procedures have been completed."

Brits "Sampling results of Phase 2 drillholes are expected to be received in Q1 2019."

A very busy period for the company's mining platform is upon us backed by major cash flow, which supports any moves to expedite the process indicated above.

Good morning everyone,

Latest reports state that EUR FeV prices as of 25th Jan 2019 were stable at $78 per kg.

What that means for my calculations is that after 8 weeks of the BMN 13 week Q1 cycle, the average price is $81,70 per kg. It looks very much like that $80-85 range will be achieved. For anyone that has talked themselves into believing that would be a poor result, i would suggest think again. That is a very solid and highly profitable price.

To demonstrate this, let's take a 800 mtv base case production figure.

H1 operating costs were $32,500 per mtv at ZAR 12.3 and BMN reported production costs of ZAR 248 per kg.

Q1 operating costs assumed at circa $30,000 per mtv at ZAR 14 and BMN production costs guidance of ZAR 255 per kg.

The production guidance was communicated in the Q3 update and was ranged between ZAR 250 to 255. The full year prodcution guidance was stated as 2,600 to 2,650, which effectively placed Q4 at 700-750 (i will ignore the 3). So, at 750 mtv one may assume that the ZAR 250 is attributable. A move in production above that figure will naturally begin to reduce the ZAR 250 further. I choose to maintain the ZAR 255 figure and ignore any further gains simply because the ZAR/dollar exchnage rate is also starting to run slightly below the ZAR 14 figure. Thus any buffer acts to cancel that negative out.

At operating costs of $30,000 per mtv, EBITDA would be running at $51,700 per mtv. Thus delivering $41.4m in EBITDA at 100% Vametco.

At $1.30 per pound exchange, 74% ownership and 70% realised profit, Vametco would deliver BMN £16.5m net profit in Q1 2019.

Now I don't really believbe that we will ever see that because clearly the company is in a phase of steep growth, so agreat deal of cash will be re-invested prior to the bottom line figures being generated. That is why at the very least the 100% Vametco EBITDA figure is most relevant, particularly when one considers there may be a major investment due to take place at that facility and the 26% BEE partner will have to pay their way to a degree.

Whatever the case, BMN at 800 mtv and $81.70 per kg FeV, is capable of delivering £66m in profits. Q1 cannot do anymore and will deliver circa that figure. So what I need to see is the improvement in production, which to be fair is already signposted at minimum 700 mtv. So all I am asking the facility to do is generate another 100 mtv maximum with up to 3 months to tweak the production line to achieve it.

As the year develops, the need to achieve that $81.70 will lessen as production should expand even further.

The above reserved outlook aside, I expect better production to be higher and I expect the operating cost to also reduce further, and at the very least the $80-85 per kg range to be maintained.

Lastly, a miner in the middle of expanding its production by over 230% from a base of £66m profit, is worth considerably more than a £440m MC.

Good post Pickedpeck and I too agree that this is a worthy 2 year hold whilst CP0-5 is exploited and the abilities of the OXY Putamayo blocks are established.

On the Platanillo block it is important to remember that the numbers are more skewed than they perhaps first appear.

The RNS states that Q4 production (4,602 bopd) is Platanillo and Mariposa where as the current production (5,426 bopd) includes Indico-1.

That places Platanillo production in Q4 at circa 3,650 bopd. As a comparison the previous 2 monthly updates had Platanillo at 3,970 bopd (Aug) and 4,010 bopd (Sept). So Q4 production was down around 350 bopd or circa 9%.

However, the current production when employing the full 30% for both Marriposa and Indico-1, places Platanillo at a reduced around 2,950 bopd. So around 1,000 bopd down on the Aug/Sept performance.

The company said "Platanillo production was impacted by completion issues in Platanillo 22 and 8, which occurred during interventions. These wells have now been evaluated and are currently being treated to return them to production"

According to the latest information that i can find Platanillo 22 was producing 415 bopd in August and Platanillo circa 360 bopd. When these 2 wells are returned to production, there should be around 750 bopd added to the Platanillo production figure, which would take Platanillo back up to around 3,700 bopd and the current production figure to around 6,150 bopd.

At 3,700 bopd the Platanillo field would be running at around 6 % lower than the Aug and Sept updates. It is also well worth noting that as recently as the 2017 Annual Report (16th April) Platanillo 22 was producing 1,000 bopd. So it is a major factor in the 2018 reductions seen at Platanillo. Hence why the company diverted Rig D-10 from Pintadillo to try to deal with said issue. However, what has infact happened is the well and thus the Platanillo field has lost circa 600 bopd production.

There is no doubt that Platanillo is problematic and holding stable output an issue, but at the same time the size of the issue isn't perhaps as big as the figures indicate, although it would be good if the company could find a way to better communicate this in the last RNS.

That aside, with Platanillo 8 and 22 back up to their pre-problem levels, the comapny's production base is over 6,000 bopd with the CP0-5 minimum 6 well programme to come starting with Calao-1.

One last offering from me today.

All of this, all of the developments associated with being ready for what the energy storage arm needs in order to take advantage of projects like the one at Eskom, has all been made possible by the success that the Vametco deal delivered back in 2017.

Whatever happens to vanadium prices moving forward nobody can take away the cash generation that has been achieved in 2018. What that does is give the company and its BOD the fire power they need to implement and support all aspects of the business in order to be ready. They don't need to come asking and explaining themselves to the market in order to raise finance to really attack this opportunity. A $10m electrolyte plant cost can be negotiated with the IDC from a position of strength and necessity, not one of desperation.

The only time this company is potentially coming back to the market is when the plans outweigh even those achievements, and that makes those plans all the more welcome.

BMN can afford to spend money at a level even UET cannot afford to do, because it is outperforming it on profits by a country mile, driven by that deal and the success of 2018.

That in turn has enabled organic growth to be implemented at Vametco that does not need further assistance from shareholders. Thus production rises by over 80% and the $16.5m original Vametco bill remains the same. Those still smarting over the YD elementof that deal should perhaps dwell on that thought a little.

2019 will be another strong year but with the close out of phase 3 the need to maintain such higher vanadium prices begins to recede because of the success of 2018. Why? because production will be up and costs way down. So those prices have in effect done their job already. It is achieved.

One more good year in 2019 and the puzzle is complete because then we start to introduce the electrolyte, the phase 3 production, the large scale storage mandates, leasing models etc etc. And those vanadium prices could fall back and it would not impact things in the same way.

Then it becomes about what all of that can pay for and go on to achieve in the future, but by then the last remaining battle will be over, in a war that was really won back in 2017.

Getting that Vametco deal over the line was THE moment in all of that. In my view, the same now applies to the Eskom BESS project.

My favourite Warren Buffet quote ;

"Over time the aggregate gains made by Berkshire shareholders must of necessity match the business gains of the company"

Replace Berkshire with BMN.

If I know what has been achieved and I know what it will bring, then all I need do is wait long enough for the rewards that entails.

Easy enough to say eh. . .

@Ophidian In no uncertain terms the Eskom BESS project is a game changer and whatever the BMN team does or does not say about it publicly, privately they will be throwing evervy available resource at that tender because it is a company maker for Mikhail Nikomarov and his 16% share in BE.

It is the key to Aladdins cave. It is Vametco 2 point 019.

That is why i remain convinced that any company development associated with its success, that remain in the hands of the BMN team, will be being pushed as hard as possible in order to be ready for it.

In order to appreciate what i mean by pilot scheme, one has to appreciate the project is 'small' compared to the REIPP programme that currently exists in SA, and we are just talking SA and not the planned export of the technology that BMN and The IDC have been talking about since they signed their co-operation agreement back in 2016.

This Eskom BESS pilot project includes at least 360MW of storage capacity for the delivery of 1,440MWh per day of storage per day.

Enclosed below is a fascinating document explaining in detail the REIPP programme as it stood as of June 2018.

It's only failing is that it was too early to include the latest IRP update but that will no doubt come in the next quarterly update.

It states that by Q1 2019 there will be 3,801MW of operational REIPP capacity.

Another 200MW is in the process of being built, whcih bring the total installed to 4GW.

Then we have to add in bidding window 4, which was signed off in April 2018 and covers an additional 2,305MW of renewable energy.

TOTAL 6.4GW of constructed or contracted to be constructed renewables.

The 360MW pilot BESS Project is a gateway, which will only go to improve the roll out as the technology's worth is proven in the field, and the costs to produce it further reduced by a scheme that will encourage 200MWh facilities to become 400MWh and more, plus seal what will be for me the construction of a UET led production facility in SA.

I encourage everyone to read this document in full, particularly the likes of slide 17, whcih makes a mockery of the notion being banded around SA, that coal is in anyway still cheaper than the REIPP programme, when bid window 4 is considered the correct comparative data.

file:///C:/Users/Owner/Downloads/20181024_IPP%20Office%20Q1_2018-19%20Overview.pdf

@Ophidian I would dearly like to think so but in reviewing the documents I had a very long look once again at the Energy Storage Webinar 101 slides 10-12, and whilst I am no expert in the technology, I could not find ample reason to write off Lithium technology completely. So i believe it will come down to other factors even at that size.

In all honesty I would not be surprised to see all 3 main technologies currently being tested at Rosherville (Zinc, Lithium and VRFB) being given a chance. After all as large as the project is, it is still 'only' a pilot scheme designed to encourage expansion of the industry in SA to support greater roll out at lower cost. So seeing all 3 technologies out in the field, assuming they are indeed all capable, would perhaps be in Eskom's interest. Remember Eskom aren't paying the bills.

That said if it is competitive tender and Eskom want value for money from the off then I cannot see past a BE IDC backed localised offering that is potentially backed up by a leasing option, because it has to be eaily the most cost effective offering out there.

My focus is on 1 package win, that's the only trigger they need to stimulate bigger internal plans. I also think given the risk highlighted by The World Bank of there being more than 40 sites in what isn a tight set of deadlines, the reality will be that the packages will need to be spread out, which again lends itself to the pilot scheme being loss making and designed to stimulate the industry.

That of course shouldn't prevent BE and their partners having a crack at all 4.

http://www.bushveldminerals.com/wp-content/uploads/2018/11/Energy-storage-101..pdf

The truly mouth watering number is the minimum $468m in finance that has been allocated by the World Bank, the AFD and the Clean Technology Fund, for the 1,440 MWh of energy storage that the project will finance.

On a mean average calculation the first phase total tender of 800MWh is worth around $260m across 3 - 4 contract packages.

I repeat $260m across 3-4 packages.

In the FM 'Bringing 2018 to a close' blog he stated that the priorities for 2019 included ;

"securing large scale mandates for VRFB deployments."

A slice of that $260m pie is exactly that and it is in their backyard.

@raz10 our BESS reporting wires seems have been crossed this last hour or so.

The article whilst written in January employed the data as it was prior to the restructuring. The two key factually incorrect statements are the 47 sites (now 42 sites across 4 provinces) and the deadlines for the installation of the first phase of batteries is actually the end of 2020, and not Dec 2019 as implied.

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"Since 2016, Eskom - the Borrower - has tested thoroughly the main battery storage technologies at its Research center in Pretoria. These tests included security and environment aspects during operation within the context of South
Africa's local conditions." (World Bank Safeguards Doc)

This statement is not strictly true when it comes to the VRFB due to the delays incurred with the electrolyte. However, the Eskom document (ESMF) includes analysis of all electro-chemical battery technologies including the VRFB.

Furthermore, the previously posted World Bank Restructuring Paper of 30th Nov (see immediately below) includes the following statement under "Technology risk may delay implementation."

"The risk is low since Eskom has been implementing a small battery storage pilot for the past three years and use of the technology worldwide is already being mainstreamed."

"Eskom has made and will continue to make study tours to learn from manufactures and developers and has appointed a technical advisor to support design and implementation."

The main test is 90 days (as demonstrated in the Peter Langley 2017 update document, see immediately below) and so with the bids expected to be received by earliest "30th April 2019" and the bid evaluation to be concluded by earliest 2nd June 2019, there is ample float to get the battery fully tested so that it ranks side by side with the Zinc and Lithium-ion test batteries at Rosherville, which in reality are the main competition.

https://www.ee.co.za/wp-content/uploads/2017/12/Peter-Langley_Eskom_Key-learnings-from-a-battery-test-facility.pdf

It would of course still be reassuring to know that the BE led battery has completed its commissioning phase and is being tested but even a February finish would allow enough time, so I have no concerns over the timeframes given we know the electrolyt was back on site at the end of November 2018.

A fully tested UET built BE led VRFB at Eskom, when coupled with the clear cost advantages that a localised vanadium value chain can provide, is as good a percentage play as one could ask for going into that tender.

Win that tender and things get very exciting around here indeed.

http://documents.worldbank.org/curated/en/390371543618515176/pdf/Disclosable-Restructuring-Paper-South-Africa-Eskom-Renewables-Support-Project-P122329.pdf

http://documents.worldbank.org/curated/en/169331543473014695/pdf/Restructuring-Integrated-Safeguards-Data-Sheet-South-Africa-Eskom-Renewables-Support-Project-P122329.pdf

https://www.afdb.org/fileadmin/uploads/afdb/Documents/Environmental-and-Social-Assessments/South_Africa_-_Eskom_Distributed_Battery_Storage_Program_%E2%80%93_ESMF_Summary.pdf

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Further to my post yesterday regarding the Eskom BESS Project, i have been looking more into the detail of the project since it was restructured in November 2018 and have found yet another World Bank document (see post 2).

In terms of importance, in my opinion this is the Vametco of 2019, except this time it propels BMN into a market 10 times greater in size, so it is well worth the time and effort to understand and follow.

Having reviewed the wording across all documents (note quotes are from various previously posted documents) I have found that phase 1 of the project has been updated to 42 sites from 47. Those original 47 sites covered 801MWh of battery storage spread across 4 South African provinces.

Those 4 provinces remain but there is currently no visible update to the 801MWh so the actual phase may have been reduced slightly or several sites coupled together. I will assume it remains 801MWh until I find evidence to the contrary.

According to the World Bank restructuring paper dated 30th November 2018, which is the latest document available, those 42 sites will be packaged into 3 to 4 contract packages. So whilst we cannot say how big each package will be, the average size would be between 200-265 MWh. (yesterday I stated that all 1,440 MWh of the total project would be split into 3 to 4 packages, that was incorrect).

This has been done due to the "challenge in meeting the already tight timeline." In my opinion that favours a fairly equal distribution of projects in the packages.

The total estimated minimum value for the battery storage element of the project is $468m. That places the mean average value per MWh at minimum $325,000. However, i repeat it is a minimum figure.

In essence Phase 1 consists of the "installation of container-encased battery storage facilities (approximately 8m high) consisting of grid-scale electrochemical batteries" which will be "installed primarily on already disturbed areas
within existing electrical sub-stations."

Phase 1 will also include the battery storage required to support the 100MW Sere Wind Farm, which formed part of the orignial World Bank backed scheme and situated in the Western Cape.

"According to the South Africa EIA law, a full EIA is required if the volume of hazardous waste generate from a facility is above 500 liters. Based on a high-level environmental analysis carried out by the Eskom environmental team, each battery storage facility will not generate hazardous waste at a volume greater that 500 liters"

"Eskom anticipates the environmental approval process timeframe of 6 months per site (which will be carried
out in parallel)."

"first set of batteries to be installed by end-2020"

"Finalize bidding documents: March 15, 2019"

Tick Tock.

Note - The Eskom document is out of date compared to the World Bank one but it still contains additional information that are of relevance.

@Pdub Good morning. May I also wish you well with your pending battle.

I have witnessed your contributions here for a good many years now and you name is central to what this BB is all about. Whilst some may at times disagree with you, nobody can deny you are a battler, nobody can deny that your will power in standing up for what you believe in, particularly in times of adversity, for which you are to be commended.

I am sure you will bring those same qualities to the fight that now awaits you. Stay strong and we will see you on the other side, fighting and battling once more for your investments and beliefs, as you always do.

I wish you and your family all the very best.

Ramaphosa says in his press conference

"in the next few weeks we will be announcing a set of measures to stabilise as well as to improve the company's financial position and ensure uninterrupted energy supply to the country"

I look forward to hearing what that entails.

https://www.cnbcafrica.com/uncategorized/2019/01/23/wef19-south-africas-ramaphosa-speaks-at-davos/?preview=true&_thumbnail_id=326352

Here are a couple of interesting links.

The first is the set up for estrella rig E-2029 for Indico-1. The second is an article printed on Estrella's website that was taken from the Columbian Ministry of Mines and Energy website with some interesting quotes from the Minister of Mines and Energy, María Fernanda Suárez.

The NHA of Columbia has a large vested interest in CP0-5 and it is in their interests to see the block exploited in an efficient manner. It also goes to show how significant this find is given the high level political interest being shown in Columbia.

https://www.academia.edu/37845332/E-2029_Rig_Fleet

http://www.estrellaies.com/es/noticias_11.php

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That in turn leads to ;

"increasing the value and penetration of wind and solar energy into the grid, through demonstrating an approach to managing the variability of these energy sources and making VRE dispatchable" (Item 20) BINGO

The tenders are due out mid March 2019 but it should be noted that ;

"NERSA has decided that generation licenses will be required for Battery Storage systems.
It will be a 4-month license process. Eskom has engaged with NERSA and will submit a license application for each
site in December 2018." (Item 22).

I have of course talked about all of this previously but it is something that is worth repeating over and over again. Bushveld Energy has no better bigger chance than this. Whatever the scale of their involvement will be, a circa $117m contract package to build a 300MWh plus battery project for Eskom, that is banked by external funding that is looking to support companies exactly like Bushveld Energy, to expand their capabilities to secure even greater amounts of work with Eskom, is absolute gold dust.

That's why 2019 will be for me the year of Bushveld the energy play. Yes there are major movements on the mining side of the business too, but they are all really tied back to supporting BE and its assault on that $70 billion energy storage market.

I feel very strongly that such a contract win would completely re-shape the market's view of what BMN is about and what it is capable of. That is why I also believe that all associated news updates will be released prior to this event taking main stage, because BMN needs every weapon in its arsenal in order to really exploit this opportunity.

DYOR as usual

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I have come across another World bank document that was issued on 7th December 2018, which is just over a week later than the restructuring paper for the CSP Project, that was the basis for the pieces published on the Bushveld Perspective.

This particular document covers the overall Eskom Investment Support of which the CSP project is one part.

I would encourage all those interested in BMN to have a good thorough read of it in order to appreciate the scale and influence that this project is going to have, both on Eskom and its REIPP programme moving forward, and those battery developers that are fortunate enough to play a part in it all.

A few reminders :

1. The Eskom BESS Project is a 2 stage 1,440 MWh roll out.
2. The total estimated cost is $655m with the total battery element expected to be "at least" $468m.
3. Due to the sheer size of the project and its "tight timeline"

"Eskom plans to consolidate the sites into three or four large contract packages and has also put in place separate project teams to manage these packages."

As an example, 4 packages distributed evenly across the sites and estimated minimum cost, would mean that one package would be approximately 360MWh in size and be valued at circa $117m.

Item 24 of the report states this ;

"The rationale for implementing BSP is dual -- to enable an increase of the share of VRE into the power mix and to
improve the local and overall system reliability, thereby enabling more customers to be connected to the grid"

" As the proportion of VRE (wind and solar PV) in the South African power system increases, the need to quickly ramp up electricity supply from other sources will also increase."

What that is saying is that the current 1,440MWh project, as big as it is, is a test project which is intended to lead to greater uptake as the SA REIPP expands. All of which is in line with the latest IRP and the call for a greater renewables mix.

Items 27 & 29 state the following ;

"the net present value of the battery program is negative (- US$139 million)."

"Because of the pioneering role of this battery storage project, its assessment should not be limited to the amount of
clean energy enabled and CO2 offset but the impact that the demonstration would have on maturing the technology,
lowering costs and enabling scale-up. Concessional funding is needed at this stage to support maturity of the
technology."

The project is being supported as a means to encourage greater investment and expansion of battery technology. Its not about the project being profitable, it's about the right technologies being encouraged to exist, to expand and to support wider more cost effective inclusion in the future.

http://documents.worldbank.org/curated/en/929211544210220055/pdf/Disclosable-Restructuring-Paper-Eskom-Investment-Support-Project-P116410.pdf

@Daisan From what I have been able to find out there is clear evidence that European FeV prices have at the very least bottomed out in this particular re-trace. My opinion only of course.

We should all appreciate that the combined period of the run up to Christmas and the Chinese New Year, is the strongest and longest period the vanadium price must endure without significant Chinese demand, across the entire year. It doesn't really matter if its down to winter stocks being run down, the extended holidays, the fact that steel mills in China really did stock up in anticipation of the new rebar regulations, or indeed a combination of all 3. It is about the fact that given the potential multiple headwinds out there, European FeV prices have been able to turn north right in the middle of that period when in reality they should be being pressured by Chinese stock that cannot find a home, but they aren't.

European FeV prices were as low as $71 on 21.12.2018. There is visible evidence that they were $75 on 04.01.2018 and that they have since risen to the $77-78 range as of last week. That is an impressive move given that Chinese prices are hovering around $70 and the Chinese market was very quiet during this stated period of rises in Europe and so the export market from China seeking better prices, should have been stronger.

Prices could well retrace a little as we approach the Chinese New Year but from what I have seen of the vanadium market these last 2 years or so, is that it is about the physical signal of a turn in the opposite direction that is key. Yes there have been minor corections along the way, but when the trend changes it is a solid and significant change.

More importantly, if European prices can rise during the Christmas holiday period, when Chinese traders remain active and have the opportunity of better prices, given they don't celebrate this holiday, then what does that say about the European market going forward into periods when those Chinese buyers come back in.

That is why for me the 10% or so move north over the Christmas period is more significant than it is currently being appreciated for. If Chinese prices had been higher than Europe then I would be less focused on this, but they weren't when this action started back on 21.12.2018. It's all opinion driven based on limited data, but I believe this lays the foundations for the strength of what we are about to witness post Chinese Year on all pricing fronts.