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I applaud the measures being implemented by South Africa and I applaud the delivery and leadership from Ramaphosa. Yes it is a 3 week lock down but they have quite rightly bit the bullet early, in order to curb the outbreak as early as possible. A good many countries could learn from this, including the UK.

What I wanted to hear was that businesses would receive support through this period and that has now been confirmed.

Corporate taxes offset mechanism for a start with more measures to come. South Africa isn't the wealthiest country in the world and lord knows they have crippled themselves well before this virus came along, but the measures announced give them as good a chance as anyone, to limit the full impact, as far as is humanly possible.

For all my criticisms of the leading party in South Africa, the country can be proud of its leadership tonight.

President Ramaphosa is due to address the nation at 19.30 local time, so around 40 minutes from now.

https://www.enca.com/news/covid-19-ramaphosa-address-sa-1930

Further to my earlier posts and my point regarding the Rand ;

"Investec projections for a "lite" scenario show the rand could trade at an average of R19.50 to the greenback during the second quarter of the year, before hitting as low as R22/$ in the third quarter and then moderate to levels around R16/$ by the fourth quarter of 2021. In this scenario, a downgrade to junk status by Moody's is accounted for."

"In a severe scenario, which takes into account a global recession and global financial crisis, we would see the rand average R22 to the greenback by the second quarter of the year, before worsening to R24/$ by the third quarter. It is expected to moderate to an average of R16.50/$ by the fourth quarter of 2021."

Personally, I think such estimates tend to stretch too far in either direction but these are extraordinary times and at such times extraordinary things will be seen. A prime example of which are the moves made by the FED today. Moves that unfortunately will not be the last.

https://www.fin24.com/Economy/South-Africa/rand-could-weaken-to-r19-as-risk-of-global-recession-strikes-20200323

Finally, when all is said and done, no doubt the vast majority of contributors here live in good strong economies with good health care and full rights.

Whilst losing money in investing hurts and individuals and families will not doubt come under extreme stress during these times, do try to spare a thought for the people of South Africa, Brazil and all the other poorer nations where this virus is now starting to take a hold.

Deaths closer to home, always understandably have more affect on us personally but whatever the numbers that come out of England, Germany, even Italy, are, they are highly likely going to pale into insignificance compared to what these other countries are going to suffer.

And they are going to have to go through it at a time when the wealthier countries are only really able or willing, to think about themselves a d their own needs. How many nations are going to ship out ventilators or hospital staff, when these country's systems come under the most stress?

Perhaps South Africa or Brazil will somehow get their outbreaks under control quicker, or more effectively. For that I am willing to hope. The percentages say they won't. So spare a thought for all those families and workers, whose efforts have created the opportunity that so many here have profited from, because they are likely going to need every pray we can muster.

This is a time when investors have to work harder than they have ever worked before. If you aren't reading, following, reviewing, with every spare minute you have, then you are failing yourselves and your investments.

This is not a time to be hoping, this is a time to be doing and ensuring, to the very best of your abilities, however amateur you feel you are.

I have laid out my case for what BMN can expect and how I believe they will overcome it, to reach the other side of all of this.

There will be pain but that will be a world wide phenomenon.

It is for each individual investor here to do the same and decide for themselves. Nobody else's opinion should be doing that for you. Check every fact you can yourself. Read every article presented yourself and form your own opinion on it.

Not advice but DYOR is as relevant now as it ever was.

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BMN can make progress in other areas of their business, even with interrupted production.

The electrolyte plant can continue through to financial sign off/contract award. Then it'll be about what restrictions are in place for the contractors who are to build it. If the start date is early H2, then perhaps the more restrictive measures that Ramaphosa and his team will need to instigate, will by then be over.

The deal with Redt should continue and I see no reason why the Enerox deal would'nt complete, though I now expect a lower price because the risk is higher and Cellcube have even fewer options before them.

I would be surprised to see expansion plans at Vametco and Vanchem instigated. I would think cash protection is now key but with targeted investments that make sense (Redt vanadium, Enerox, electrolyte plant being for me the strongest).

Businesses in this environment, are going to need to strike a balance between progress that delivers better security later down the line and protective measures, that ensure the core of the business plan is maintained.

Demand is on the floor right now and that is going to affect world markets for some time to come. China cannot carry us all on their own. BMN's best focus for me is to drive all plans related to energy storage because much of that market should be there, whatever happens economically for the foreseeable future.

They have enough production to support that part of the business for the foreseeable future. At 4,500mtV, BMN has delivered the sort of production that is needed, to ensure their costs are as low as they can be, whilst prices remain suppressed. We can all be very grateful for that.

The Rand, which is currently running at ZAR 17.85 to the dollar, is going to be another big help, whenever BMN are producing. The big question right now is what will Moodys do on 27th March. Will they really downgrade S.A. at the height on this crisis?

Even without their intervention, without a total collapse in the dollar, I cannot see how the Rand is going to trade better than we see today and if anything it is going to drop even more. We could well see some mind blowing exchange rates in the months to come.

That all helps BMN with their production costs. Current guidance at full 3,200mtV for 2020, is $17.20 per kg at around ZAR 15.

A +20% drop in the exchange rate over 2020 will deliver a considerable advantage and assistance, which will ripple not just through BMN's mining cost base but also into the energy storage markets, making all their products far stronger for it and the business better protected for it.

This post is not designed to push a negative angle. It is designed to touch upon the realities of where BMN is and likely will go in the foreseeable future. These are unprecedented times and business will be affected and as investors we must be prepared to see that and talk about it.

If we don't then someone else will and in a manner designed to hurt not

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Good morning all,

Whilst I greatly appreciate that there are at times nefarious visitors to these BBs, we must be careful not to bury our heads in the sand, by ignoring what is staring us in the face. If we do that, then those negative voices that deliver the very messages that we insist on avoiding, gain all the more traction and impact.

Before i go any further I want to be clear, that I personally feel that BMN will survive this crisis, that it has a very bright future and will in time, go on to deliver on its plans to become a fully integrated vanadium producer.

What this Covid outbreak is effectively doing for a great many companies, is creating a time loop, by pushing established plans to dates later down the line. The problem we have right now is that the extent of this extension of time, is not yet fully known and so is difficult to measure. The more intelligent of the nefarious characters out there no doubt know this.

The single most important question for all those companies being affected by this outbreak, is will they still be in business when this is all over. As I have already stated, I believe BMN will be one of them but many will fail, be sold, or be far more diluted on the other side.

The disruption for companies will depend very much on their government's abilities to maneuver their economies through their individual crisis's but also be centred on how afflicted each nation is, by the virus and the extremity of the measures placed on their businesses.

The speed with which the situation is developing across the globe is making it extremely difficult for even the said experts, to generate exact analysis of what we can expect. The situation is fluid and heavily integrated into supply chains, that are changing on a near daily basis.

So what i opinion on today may not be the reality tomorrow. It is merely where I am with what I have understood so far.

Later today the president of South Africa is going to deliver an update on the Corona virus in S.A. and the measures required to protect the people of S.A. from it.

Whatever he says, be it today or next week, investors here and across the mining sector as a whole, need to prepare themselves for the temporary scaling down of mining outputs. It is in my view inevitable.

However, if BMN has to shutdown, then so does Rhovan. Given the situation in Brazil is also deteriorating, I would think it is also a matter of time before Largo does the same. That will likely limit all 4 pure producing processors to the inventory that they hold.

In BMN's case, they have minimum 440mtV of known inventory (minus 80mtV going to Redt). They also have strong cash reserves and a $25m debt facility. So they can ride this out.

However, short term, there is pain to be had and it must not be ignored or shouted down.

I remain invested because I can see the other side and am prepared to wait for that conclusion.

Nersa have today set the clock ticking on the public comments on the Ministerial Determination for the IRP.

Deadlines for comments set at 7th May.

I wrote previously that I saw Q3 as the timing for the tender award. I think that is still achieavble, assuming no corona led disruptions.

https://twitter.com/NERSA_ZA/status/1240530035423039490?s=20

It is important to appreciate that the each of the countries of the world are at different stages of realisation, when it comes to appreciating the impact of corona on their lives and their futures.

It is a fascinating human experiment be it clearly an unwanted one.

We see what is happening over 'there' but our minds play tricks on us and tell us its not coming our way. Therefore, business is as usual.

Their attitudes will change quickly in the weeks to come.

There is a going to come a time soon enough when all the bad news is priced in and investors will start to look around to see where the individual value lies.

Are we there yet? Unlikely.

Until we are, I would encourage everyone to be vigilant with their investments, their risk strategies and their mental health.
These are extraordinary times that require us all to do extraordinary things.

For the majority, this is about getting themselves and their families through it, which surely must be the priority for us all. In doing so there is a need to support our friends, our neighbors and our colleagues because we are all going to have to dig deeper, than we have likely ever had to before.

When all of this is over, we need to be able to look at ourselves in the mirror and still like the person we see. That means acting responsibly in everything we do, in our homes, in our streets, our shops and even here.

Being anonymous won't save us because we cannot hide from ourselves.

This virus as economically brutal as it could be, will not break us and it will not beat those companies that hold the strongest cores. BMN is for me on that list.

Like many companies out there, it is going to have to change its path because the course it was on, just got dramatically changed. Just like us, BMN is probably going to have to make some difficult decisions, in order to ride out the effects of this crisis but the same goes for likely 90% of the companies that exist out there and I'm not just talking public here.

Right now the market does not really care for individual bias. Sectors are being hit hard and those that participate in them are being included, however much their individual standings may say otherwise.

Just like this virus, that time cannot last forever. A breaking point will come and the mindset will begin to change as value to risk becomes more relevant or the furthest extents of the effects of corona, become known.

As I pointed out to a contributor on Twitter this morning, GLEN and EVRAZ have all fallen some 45% during the same period BMN dropped 60%, but only BMN was in an uptrend that that time.

GLEN and EVRAZ are far more global than BMN, who are heavily S.A. focused, yet the falls are similar.

For GLEN and EVRAZ to gain from the expansion of green projects and batteries, these markets need to deliver a global performance, that outweighs the affects of the global slow down.

As a fully integrated producer with direct connections to both end users and the powers that decide the projects those end users tender for, BMN does not need the same results. It just needs the success to be seen in its own backyard.

Today's announcement is another strong indicator that BMN is tightening its grip on the bolt to that backyard.

When the dust settles and sectors become individual entities once more, BMN integrated model could well be the beacon that lights the way, to those that to date have failed to follow.

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It is understandably difficult to appreciate what this means for VRFB and the vanadium market moving forward. With this damn virus in play, there will no doubt be some curve balls too but if investors can see beyond the craziness of these past few week, then they should start to appreciate that the strongest VRFB offering ever is getting ready to hit the market.

This is not about there being a market for battery storage but about who gets what share. So this BMN driven move (which should never be forgotten. It is BMN who enabled this merger to happen and triggered the finance that we see today), is a very big deal within the greater context of that market and is a significant step towards VRFBs realising the shar eof the market, that to date has been study led only (eg. BNEF).

Its 123MWh today without all of these new found advantages in play. But tomorrow and in the years to come, it has every chance of being something else completely. . .

and its BMN vanadium and BMN vanadium only, that is backing it from the beginning.

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As stated already here today, the pipeline of projects supports my view from Friday, that Redt/Avalon can deliver BMN 30MWh of vanadium demand in 2020.

However, the current project pipeline is a "merged pipeline" only. So the total pipeline of 123MWh (c.650 mtV ) is what the 2 companies were able to generate, be it not guaranteed work, based on their own company formats and approaches.

From the Redt RNS ;

"redT's expertise in energy project analysis has enabled the Company to find viable projects even with product costs that are higher than those of Avalon's VRFBs. By combining Avalon's product cost advantages and redT's project analysis expertise, significant new commercial opportunities are expected to emerge."

"In addition to this, a number of projects initially targeted by redT that were not pursued because they didn't have an adequate return, have favourable economics when using Avalon's product costing. In addition, the breadth of geographic coverage (namely the addition of North American and Asian markets to redT's current focus areas of UK, Europe, Africa and Australia) by the Enlarged Group will allow a focus on projects that are most compelling and profitable for the business."

"Invinity will utilise the aforementioned experience of its teams to combine the best cost-down engineering advancements of Avalon's technology with redT's project and application experience and sophisticated commercial business models to unlock new markets, applications and other commercial opportunities afforded by an estimated 40 per cent. reduction in product costs which the Enlarged Group hopes to achieve over the next 36 months."

"On Completion of the Merger and associated fundraise, Invinity will enjoy a position of relative financial stability amongst its peers. This will allow Invinity to achieve the minimum scale required to compete in a global market currently dominated by large incumbent lithium-ion manufacturers from Asia and the United States."

There's more information and quotes to be had, but in essence this lead case in the long awaited and quite frankly always needed, consolidation in the VRFB OEM space, gives these new entities the necessary synergies and efficiencies, to drive their VRFBs beyond cost parity with lithium-ion. That in turn delivers the last true building block in an offering, which already holds technological and safety advantages.

Then to top it all off, throw in a guaranteed vanadium supply and rental product.

It is no longer good enough to simply use historical performance to judge VRFB sales of the future because there was never an entity like the one that Redt/Avalaon have just created.

Nor was there ever a VRFB company that was strategically backed by a vanadium miner who sits on its BOD and own its shares.

One final point from me.

Another big miss by the market in the Redt JV update.

"The vanadium electrolyte will be processed from feedstock from Bushveld's primary assets in South Africa, by an industrial partner in the United Kingdom."

What that does in one fell swoop, is remove the question over BMN's ability to produce enough electrolyte for larger scale mandates, such as the Eskom BESS Project.

If BMN can find an external electrolyte partner in the UK, they can find one closer to home as well.

Howeever, the Eskom BESS project is now set up very well for the electrolyte plant and although BMN conceal their plans well, by talking about the plant supporting exports of electrolyte etc, the reality is that that will all change if they go after the Eskom project with real gusto and win a sizeable portion of it.

The only thing preventing the upgrading of the electrolyte plant to 400/600/800MWh, are the contracts to justify it. The Eskom project may well be worth it, or failing that will be on hand to support a good sized project won from it.

Now that localised VRFB assembly.

The Feb 2020 presentation slide 4, states "Support of local VRFB assembly in South Africa."

It says support not develop like it does on that very same slide for electrolyte.

From the BMN RNS dated 12th Nov 2019 ;

"These partnerships support Bushveld Energy's business model, that includes electrolyte manufacturing and rental, VRFB manufacturing and deployments."

Whilst that is a general line taken from the "Strategy for partnering with VRFB companies" RNS, it does not reappear in the Redt/Avalon RNS nor is there mention of that particular investment supporting VRFB manufacturing.

Make of that what you will but the "support" element appeasr to be saying that one of the known OEMs will be supported to set up local manufacturing, with BMN certainly helping with the finance element and likely the S.A. BEE and associated obstacles.

All of that looks to be set up around the Eskom BESS project tender.

More importantly, the language being employed is that it a path that is already partly trodden.

Under 2020 priorities the company states "Investigate business case for South African based VRFB assembly."

For those that are perhaps newer to BMN, the exact same was said about the partnership with UET, but the resulting demonstration project at Eskom , never felt like it was anything less than meant to be.

BMN have always been further down the road than their result show and the words they print, have often been a road map to what was to come. Vametco being exhibit A. I know this because I was there.

There is much more than meets the eye here, limited news flow or not.

@1210 I am not writing anything off I assure you. This is more about breaking down the opportunity by first and foremost starting with what we have, which is a lot.

The investments in the OEMs has now opened up many new markets including Europe and the United States and added several new options for local assembly in S.A.

However, what i am attempting to demonstrate, without any desire to ignore those opportunities, is the potential impact that already exists, from what is already known.

There are 3 OEMs in play and one exceptionally large scale mandate, on their doorstep, which as a package can deliver considerable benefit and support to the company, before they even start to think about other market opportunities.

It is however important to understand that BMN's markets will be where the OEMs decide to tread, and I am sure between the 3 of them, everywhere is potentially in the mix.

One more very important point. How BMN deals with each OEMs will be decided by the project and its location. Cast your mind back to the Crux interview and MN's comments about the level of involvement that BE will have, particularly if the project is in S.A.

This is particularly relevant to the Eskom project. The indication from the interview is that BMN will come at as developer, so the revenues could well be far greater than simply securing vanadium/electrolyte supply contracts.

My example only discussed the vanadium sales benefits, as a means to demonstrate their ability to make meaningful profitable sales, even in a downturn and that that in itself, is quite a move i their markets. None of which is appreciated by the market to date.

We haven't even discussed the value chain benefits of being further up the chain. The Eskom BESS has a minimum battery element only valuation of $468m

At 800MWh, that's $585,000 per MWh, although I am sure that is based on a contract that does not include rental. I also recognise the simplicity of my calcs. Using my earlier example of 20MW (80MWh), that's c. $46.8m in revenues, compared to a Vametco doing $111m for the whole of 2019.

However, none of what i am presenting is designed to nail down the exact detail, it is about open up the thought process.

To be clear, my mind cannot bring itself to allow me to believe that BMN, as a developer, could win the whole Eskom contract. Nor do I believe that BMN feel they need to. What BMN want is a sufficient number of contracts over an extended period of time, to justify the localisation of VRFB assembly and they don't need a great many to achieve it. my recollection is circa 10MW.

What that then does is bring the OEMs back into play once more. More on that subject shortly.

To be absolutely clear, no one should take the $46.8m as gospel. I am merely using the World Bank figures, which are real and making a very simple calculation. The point is the opportunity it demonstrates and how it can dwarf all of what BMN has done to date.

If I may be direct. The JSE listing does not matter one iota right now. It creates no benefit to UK investors that I can see and with the market tumbling will likely get a luke warm reception anyway.

For whatever reason it is delayed, it is and personally I am not concerned by its elusive nature.

The same goes for dividends. Forget it. BMN right now needs to deliver on its plans and all cash will be needed. So keep it, spend it wisely and wait for another day to pay dividends.

The market is busy worrying itself about BMN's ability to survive what it expects to be a global downturn.

The trouble is that the market is lazy and is measuring BMN against the wrong metrics.

Investors are questioning BMN's ability to access the energy storage market. The fact is they already have.

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So the percentages point to success on that project even if it 'just' vanadium and electrolyte supply. In a global downturn, if that is what we are facing, the vanadium supply into that concessional funded project could be a god send.

Therefore, 10% of the project is not all that big an ask.

I appreciate that some projects may freeze up if finance becomes an issue or the companies involved tighten their belts. However, there are enough clean fund projects coming through to meet the limited demands I am setting. The Oxford hub, the Eskom Project and the "the other African projects within the World Bank 17.5 GWh energy storage roll-out programme," are testament to that.

So i am back to my 500mtV in 2021 and its a conservative base case at that.

In 2021, BMN is likely worst case scenario producing 4,500mtV. That means over 10% of the then current production is making its way into energy storage projects. That's newsworthy and for me absolute minimum to expect.

Now lets take our conservative hat off and open up the door to something more exciting but not completely implausible.

What if BMN goes and wins the whole of the phase 1 Eskom BESS Project? On the basis of what BMN describe in their Redt JV update, they would struggle to produce enough vanadium for it without severely disrupting their steel markets.

What then happens to the steel market when it loses those 4,260mtV of supply from BMN?

What happens when Redt, Avalon and Enerox start to gain traction, following successful demonstration roll outs of the rental product?

What if they achieve more than 15MWh each in 2021 (Redt/Avalon 30MWh together). What if Redt are able to reignite their 700MWh German contract with this new rental product and a new guaranteed supply? First phase slated at 2 x 40MWh.

That's 425mtV of vanadium.

What about Enerox?

From Oct 2019 ;

"The company is nearing several large-scale contracts which will be executed once production capacity can be planned to adequate levels."

"Over the past year Enerox launched the Generation 4 product series, the most advanced (“VRFB”) on the market today as stated by independent industry experts."

Is 15MWh really asking too much. isn't the reality in 2021 much higher?

This is the power of having not only the best technical VRFB manufacturers on board (and we are talking 3 not just 1), but also the fact that BMN has the method and the product, to drive them like they have never been seen before.

So what then if Enerox matches Redt in 2021? Another 425mtV of vanadium. Why is that not achievable?

That's anywhere from 500mtV to 5,000mtV of vanadium going into energy storage in 2021, with the majority utility/power generation based companies, in part backed by clean funds and non cyclical in their decision making.

Somewhere on that scale of delivery, the trigger point sits. It has to.

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Back to that trigger point 'briefly'.

The 15MWh deal with Redt secures 80mtV of vanadium supply.

Given the year is still fairly young and there are 2 other VRFB OEMs in the mix (Avalon should soon be part of Redt but has its own project pipeline), it is not beyond reason that this deal could triple in size in 2020. That's not such a big ask for OEMs that are financed and have access to vanadium stock and the benefits of a rental product.

If so, then BMN could well secure around 240mtV of vanadium salesinto the energy storage market in 2020.

In 2019 BMN sold 2,392mtV of vanadium.

On a like for like basis (and I recognise that BMN is a bigger fish in 2020 with Vanchem on boadr and Vametco expected to produce more vanadium), that would have BMN achieving over 10% of its total 2019 sales, in energy storage in 2020.

That would be quite a headline.

I appreciate that I am making predictions here but is 15MWh of sales per OEM all that much, given BMN has signed an exclusivity agreement with all 3 companies and has first right of refusal.

Then we have the Eskom BESS tender and its upto 800MWh of batteries.

I remain convinced that BE will want to hit that project as a main developer, alongside the IDC.

However, it does not truly really matter how it comes, so long as BMN get the vanadium and electrolyte supply.

To imagine that BMN would not employ their rental product for such a prestigious and large scale project, is for me simply not possible. The opportunity is just too great.

The project keeps pushing itself as an EPC with one lucky winner. However, even if it gets broken up into packages. Even if in the end BMN and their partners, however they blend together, only secure 20MW of the 200MW on offer. So 10%. That still comes in at around 50MWh of vanadium supply, which is another around 265mtV of vanadium.

Now that project highly likely now will not need electrolyte until 2021, which of course brings the electrolyte plant into play. That aside, that's another 10% of those 2019 equivalent sales booked for 2021.

Even if the 2/3 OEMs only delivered the same feat again in 2021, so 240mtV of vanadium demand, that would mean BMN in 2021 would be supplying over 500mtV of its production into energy storage projects.

Now its all theory but its bare bones in its approach. The OEMs are real, their project pipelines are real and they never had supply security before or a willing rental product to drive sales.

I am only asking them to achieve 15MWh of sales in a year. That's because BMN gets all their sales if it wants to, so we are not talking a piece of a much bigger pie and so a need to be more successful.

The Eskom BESS project is very real, be it slow. Certainty, death and taxes come to mind, but the Eskom BESS project cannot be far behind. Anyone who has done their homework can see the clear tie ins here, the ground work put in, the influence from BMN and in particular the IDC.

@TrevorBrooking If BMN get this right and able to exploit the opportunity that is far more of a reality than they are given credit for, then yes i absolutely agree, that in time they will be a staple part of a great many income driven funds.

And if another big downturn comes along, the affect on the SP should be minimal compared to what we have seen these last few days.