Nov 18 article cont..24 Feb 2019 18:41
Bushveld’s targets in the short- and medium-term are to increase vanadium output to 5,000 metric tonnes a year and 10,000 metric tonnes respectively, from the current projection for 2018 of between 2,600 metric tonnes and 2,650 metric tonnes.
It has completed its phase two expansion plan at Vametco, and Bushveld has now begun phase three. To get to 10,000 metric tonnes a year, the company is looking at either building a new USD100 million kiln at Vametco or buying brownfield sites nearby, or even both.
Bushveld will look solely at South Africa for acquisitions, Edeh said, commenting: “South Africa is the natural territory we are looking at. It is the region with the largest deposits in terms of resources and there are so many idle facilities around Vametco”.
This aim to increase output, Edeh added, is part of a plan of allowing Bushveld to capitalise on growing demand.
“The vanadium market is in a deficit because supply is concentrated and limited and there is a growing demand from the steel industry, especially with the new regulation in China which kicked in this month.”
“This regulation is expected to increase demand by 10% to 15%, as China counts for over half of all vanadium consumption. There is also growing demand for batteries, which is expected to account for 44% of vanadium demand by 2027,” she continued.
“We expect demand both for the steel industry and for redox flow battery deployment to increase, but we believe the only people able to close the supply and demand gap are pure-play vanadium producers which are us, Largo Resources, and Glencore”.
Largo is a Canadian firm which operates the Maracas Menchen vanadium mine in Brazil’s Bahia state. It is expected to produce between 9,150 tonnes and 10,150 tonnes of vanadium oxide this year.
Currently, Edeh said, around 70% of the world’s vanadium is produced as a by-product by coal companies, and they cannot increase vanadium output as their operations are guided by steel demand.
Looking at trade tensions, mainly between the US and China, Edeh said these will not affect sales too much, with only 3% of the company’s product going to China.
Bushveld’s recent production has been disrupted by strike action, but Edeh said this is now resolved.
“We had a two-week industrial action. This was more of a legacy issue, it was around the employee share ownership payment structure,” she said.
“We solved this with workers in September and it was a matter of putting in an employee share ownership payment with workers. Our policy is to make sure all stakeholders participate in the performance of Vametco,” she continued.
“When it is performing well, we want to make sure everyone is part of this upside.”
Earlier November, Bushveld did cut its 2018 output guidance as a result of this industrial action. It now expects between 2,600 metric tonnes and 2,650 metric tonnes of vanadium, from 2,850 metric tonnes and 3,000 metric tonnes before.
However, with production costs just USD20 per kilogram and
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