Investors Chronicle tip11 May 2020 09:35
Bushveld Minerals’ (BMN) annus mirabilis of 2018 is well behind
it now. The vanadium miner and vanadium redox flow battery company
has had to get used to a world where ferrovanadium is not over
$60 per kilogram (kg), but under $30 per kg and is chipping away
at a sustainable business model. This involves the Vanchem plant
bought in 2019 and now in operation, which also allows it to get
production going from the Mokopane mine (it now has a permit) far
more cheaply than previously expected.
On top of vanadium production, the company has expanded its
interests in batteries. While the majority of Bushveld’s vanadium goes to
the steel industry, its various energy storage businesses hedge the company
against vanadium price volatility. When prices are high, its mining
margins climb, and when prices are low, the battery business wins out.
We have recommended a speculative buy on Bushveld at 25p and higher,
and enough promise remains to recommend the shares at 13p.