Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
Https://www.esi-africa.com/industry-sectors/future-energy/eskom-embarks-on-its-battery-energy-storage-programme/
This reports states 20MW of Phase 1 will be Lithium
“We are pioneering the implementation of the BESS technology, serving as a large-scale commercial project to validate the technology’s feasibility and benefits. The successful implementation will pave the way for wider adoption and possible export of the technology to other regions beyond the borders of South Africa,” said Eskom’s General Manager of Distribution, Operations Enablement, Velaphi Ntuli.
“The Hex project is a demonstration of what Eskom teams can do in finding alternative, innovative and lasting solutions in addressing the country’s electricity challenges,” said Eskom’s Group Executive for Generation, Bheki Nxumalo.
The Hex project benefited the local community of Worcester by employing about 250 local community members, supporting twelve early childhood centers with playgrounds and educational materials, the donation of computers, and the donation of 500 full school uniforms. Furthermore, other corporate social investment projects are to be executed before the end of March 2024.
Upon completion of the first Phase, Eskom will implement Phase 2 of the project, which includes the installation of a further 144MW of storage capacity, equivalent to 616MWh at four Eskom distribution sites and one transmission site. The solar PV capacity in this phase will be 58MW.
This is a great development for South Africa. I hope there will be more projects like these that can also help integrate more renewable energy, unlocking opportunities to meet South Africa’s huge electricity generation shortfall that has resulted in prolonged cycles of electricity rationing known as load-shedding.
I wonder if any of Invinity's batteries will be used? Hyosung Heavy Industries previously said the following;
“We have been impressed with the capabilities and operation of Invinity's vanadium flow batteries during our testing programme,” said Takeshi Yokota, President and CEO at Hyosung Heavy Industries. This means that the Invinity's BESS has been validated as a suitable addition to Hyosung's portfolio of projects globally.
https://cleantechnica.com/2023/11/10/south-africas-eskom-unveils-the-largest-battery-storage-project-in-africa/
Big utility-scale batteries are gaining increasing traction and adoption in many parts of the world, and South Africa has now joined in on the action. South Africa’s national power utility company, Eskom, has just unveiled the largest Battery Energy Storage System (BESS) in South Africa. This is not only the first one of its kind in South Africa, but also a first on the African continent.
Eskom officially opened the Hex BESS site at Worcester in Western Cape yesterday. Eskom says the Hex BESS is the first project to be completed under Eskom’s flagship BESS project announced in July 2022 to help alleviate the pressure on the national electricity grid. The BESS project serves as a direct response to meet one of the urgent needs to address South Africa’s long-running electricity crisis by adding more storage capacity to strengthen the grid while diversifying the existing generation energy mix. It uses large utility-scale batteries with a total capacity of 1,440MWh per day and a 60MW PV capacity.
Eskom adds that this Hex site is specifically designed to store 100MWh of energy, enough to power a town such as Mossel Bay or Howick for about five hours. It forms part of Phase 1 of Eskom’s BESS project, which includes the installation of approximately 833MWh additional storage capacity at eight Eskom Distribution substation sites in KwaZulu-Natal, Eastern Cape, Western Cape, and Northern Cape. This phase also includes about 2MW of solar photovoltaic (PV) capacity.
“We are grateful to the various funders of the Eskom BESS project, and to our construction partner Hyosung Heavy Industries. This is proof of what we can achieve when we work as a team and in collaboration with industry and local communities,” remarked Eskom’s Group Executive for Distribution, Monde Bala.
The BESS technology offers a versatile solution for improving overall grid performance and is in line with South Africa’s commitment to the just energy transition to a more resilient and sustainable energy future. The initiative demonstrates Eskom’s commitment in finding innovative solutions and embracing new technologies in preparation for the new era in the energy distribution landscape.
SP Angel
https://www.bushveldminerals.com/wp-content/uploads/2023/11/SPA-Q3pdf.pdf
ARC
https://www.bushveldminerals.com/wp-content/uploads/2023/11/ARC-Q3.pdf
BNP Paribas
https://www.bushveldminerals.com/wp-content/uploads/2023/11/Exane-Q3.pdf#new_tab
Https://www.miningmx.com/top-story/54898-bushveld-ceo-warns-maintenance-days-will-rise-as-he-seeks-reliability/
BUSHVELD Minerals CEO Craig Coltman warned the company would put more focus into maintenance than usual in the first six months of 2024 in order to produce higher levels of vanadium in the second half of the year.
“We will spend more funds than historically to get the assets up to a level of reliability for higher production in H2,” Coltman said in a third quarter call to analysts. “We want to improve the probability for higher output,” he said.
A 10% increase in vanadium would be “a massive positive cash balance on the bottom line”, he said. This could potentially flow from a 5% improvement on asset reliability.
A four day shutdown for maintenance had been completed at Bushveld’s Vanchem plant, in South Africa’s Mpumalanga province, this month following a nine day shutdown earlier this year. “We are really sweating the asset at the moment and there are risks,” said Coltman. Bushveld also produces vanadium, a steel feed mineral, from Vametco in the North West province.
Earlier today Bushveld announced third quarter production of 1,000 metric tons of vanadium (mtV), 19% higher than in the previous quarter. The company has targeted total production of 3,700 and 3,900 mtV for the year which Coltman said was in now in the company’s sights. Bushveld had previously guided to 2023 production of 4,500 tons.
The market responded well to the production number, which had the result of lowering cash costs to $25.5 per kilogram of vanadium (kgV) (Q2: $27.4/kgV and $29.3/kgV in Q3, 2022). Shares in the company gained 17% on the London Stock Exchange, the first real rally in valuation since investors started selling the stock in March, when it was trading at more than five pence apiece.
Another risk, however, was the impact of above-average rainfall on the barren dam at Vametco. The barren dam is part in the latter end of the vanadium processing pipeline. “We have to find a way to keep the rain off,” said Coltman.
A new dam could be built in theory, but in practice it would take 18 months to two years to complete and involve more capital than Bushveld has presently.
Bushveld is a company in crisis. In the third quarter it received just over $8m in working capital as part of $70m to $77.5m recapitalisation by unknown investment firm, Southern Point Resources. Southern Point Resources will take a significant stake in the business in return.
Critical to this process, however, is agreeing a new conversion price for convertible notes with Orion Mine Finance, one of Bushveld’s lenders, initially priced at 6 pence/share. Coltman said he was hopeful this would be finalised before the December 21 deadline.
There was a cash outflow of $2.7m as at end-June. That was less than the $7.1m in the previous year, but cash had dwindled to $3.7m nonetheless.
Https://polaris.brighterir.com/public/bushveld_minerals/news/rns/story/w63e7lw
Https://polaris.brighterir.com/public/bushveld_minerals/news/rns/story/xzkp3ox
Https://www.voxmarkets.co.uk/rns/announcement/eabeb958-93f7-46cd-a5de-f3c32d0c8768/
The project was updated on the 11/10/23. Wish it was a prelude to selling it.
https://www.l2b.co.za/Project/Imaloto-Coal-Power-Plant-Madagascar/20486
mojapelo’s troubles turned on failing to grasp the finer points of operational performance. his successor, ex-de beers md craig coltman, will tighten the screws on plant maintenance, improve data collection and implement a management reorganisation aimed at improving efficiencies. he has cut bushveld’s production forecast for 2023 to 3,700 tons 3,900t from a previous estimate of 4,500t. shareholders have still asked what’s stopping the company from “a terminal decline”.
orion debt
existential worries extend beyond the operational for coltman. one of bushveld’s seed investors, uk-headquartered orion mine finance, has yet to agree to a new conversion price for convertible notes. initially priced at 6p/share, the notes may be reduced to 3p, says bnp paribas analyst thomas martin, implying major dilution. coltman says: “it’s in both parties’ interests to get this done, so i’m confident it will be done by the year end.”
the bond is crucial to spr’s final involvement since $12.5m worth of direct investment in bushveld minerals has to be matched to the notes.
in the meantime, spr has injected r150m in short-term working capital funds. there was a cash outflow of $2.7m in the year to june. that was less than the $7.1m in the previous year, but cash had dwindled to $3.7m nonetheless.
assuming, though, there’s agreement with orion mine finance, spr’s recapitalisation proposal will proceed. spr will buy 50% of bushveld’s vanchem vanadium plant and 64% of its mokopane project in limpopo, as well as providing a further $25m-$35m in trade working capital. spr will also take over the marketing of vanadium.
as china’s economic growth continues to underwhelm, it’s a giant gamble for spr. but an ace up its sleeve is control of vanadium **** resources once owned by highveld steel, which would represent cheap feedstock for bushveld’s processing plants, even after allowing for capital expenditure adjusting its kilns.
it’s early days but coltman is nothing if not optimistic. “i’m very excited about this,” he says of **** that can be supplied at a third of the price of vanadium ore. “i have a plan.”
Https://www.miningmx.com/top-story/54703-sa-coal-investor-rides-to-the-rescue-of-bushveld-minerals/
EVER since Anglo American closed the doors on its once-mighty Highveld Steel & Vanadium in 2007, investors have tried and failed to make a fist of the Mpumalanga assets. Russian group Evraz, which bought Highveld from Anglo, went into business rescue in 2016. Bushveld Minerals, a UK-listed company that bought Evraz’s vanadium assets, has now also run into problems.
Last month Bushveld unveiled a proposed recapitalisation of up to $77.5m at both asset and listed company level. Riding to its rescue is the little-known Southern Point Resources (SPR), described by Bushveld as a “focused investment fund founded by South African mining entrepreneurs”. As R1.47bn in investment is a tidy sum, especially for assets that haven’t delivered for nearly two decades, it’s worth asking who SPR is. Few in South Africa’s mining sector have heard of it.
Bushveld didn’t respond to Miningmx questions, but public documentation that it has published describes SPR as “having an association” with assets generating $500m in revenue and $175m in earnings before interest, taxes, depreciation and amortisation. These assets include South Africa’s sixth-largest thermal coal-mining and trading company. Its principals have also done $600m of mining and mining finance transactions.
According to market sources, SPR is the brainchild of Mathews Senosi, a mining engineer and former Anglo Coal executive. He founded the aptly named Overlooked Colliery, which bought three coal mines from Exxaro Resources in 2021. Senosi Group Investment Holdings is also a 23.98% shareholder in MC Mining, a JSE-listed coal miner it helped to recapitalise last year. Senosi declined to comment when contacted by Miningmx.
Bushveld is in a bad place. Founding CEO Fortune Mojapelo fell short of production targets. Sales of vanadium for an energy storage technology known as a vanadium redox flow battery have been disappointing, especially in South Africa. Though vanadium’s bread-and-butter application is in carbon steel production, Mojapelo invested in downstream battery technology partners. This year he was forced to restructure or sell the investments as vanadium prices slumped, costs rose, and production underwhelmed.
Mojapelo, an actuary and entrepreneur, eventually resigned. In an exit meeting, he felt the full blast of shareholder ire. “From an investor point of view, the performance over the past five years has been a disaster,” said Mark Ryan of Tower Capital. “Everything promised … has been delayed, not delivered, or has cost more.”
Https://www.voxmarkets.co.uk/rns/announcement/0b30db71-eb91-49a2-9f89-a6a3cfd58031/
Bushveld Minerals Limited (AIM: BMN), the AIM quoted, integrated primary vanadium producer and energy storage solutions provider, notes the market speculation regarding Mr Kamran Sattar and Portillion Capital Ltd's intention to call a general meeting of shareholders in order to effect boardroom changes. The Company met with Mr Sattar yesterday afternoon and is pleased to report that having discussed his concerns, Mr Satter has confirmed in writing that he no longer intends to attempt to requisition a general meeting of shareholders.
The Company is fully focused on concluding the restructuring of the Orion Mine Finance convertible loan, the investment with Southern Point Resources and meeting 2023 production and cost guidance. The Company looks forward to making further announcements in respect of these discussions in due course.
Https://www.bushveldminerals.com/wp-content/uploads/2023/10/RBC-note.pdf#new_tab
Valuation
We set our price target using our long-term FerroVanadium price forecast of $42.00/kgV and Vanadium Pentoxide of
$9.50/lbs, translating into a group realised price of $40/kgV. Our P/NAV multiple of 0.70x and EV/EBITDA of 4.0x are set
at a discount to global base metal peers to reflect Bushveld’s operational and balance sheet risks as well as its 100% South African exposure. This gives us a price target of 3p. Despite the discounted valuation we see the outlook more balanced in the near term given liquidity and operational risks and leave our recommendation as Sector Perform. We assign a Speculative Risk qualifier given the company's high leverage levels (FY23e ND/EBITDA of 6.4x) and elevated costs.
Upside scenario
Our upside scenario of 21p is based on a group realised price of $45/kgV. All other assumptions are left unchanged.
Downside scenario
Our downside scenario of 1p is based on a group realised price of $30/kgV. All other assumptions are left unchanged.
Investment summary
Bushveld Minerals (BMN LN) is a South African primary vanadium producer. The company owns three mining assets (Vametco, Brits and Mokopane) and two of the four primary vanadium processing facilities worldwide (Vametco and Vachem). Bushveld is also building an electrolyte plant to manufacture vanadium electrolyte, a key component of Vanadium Redox Flow Batteries (VRFBs). Its subsidiary Bushveld Energy performs project development and battery deployment activities as well as strategic investments in VRFB manufacturing companies with the goal of promoting the adoption of this technology.
Bushveld has the highest near-term growth rate among primary vanadium peers. We expect production to improve as operations reach steady state production. An investment of $151m could raise production by a further +50% to 8,000mtV, reducing unit costs by at least 20% from 2021 levels. Our analysis estimates that, if funds were obtained by 2024, the plan could yield an IRR of +17% and add $194m to Bushveld's valuation.
Potential catalysts
Q3 23: Commissioning of the electrolyte plant (BELCO)
Q4 23: Re-structuring of the Orion Convertible loan and Southern Point transaction
2023: updates on Mustang Energy re-admission to the London Stock Exchange.
2024+: Funding to execute growth plans
2024+: Improvement in power supply
2025: Achieving steady state of production
Risks to rating and price target
Vanadium prices: stronger (weaker) than expected vanadium prices could improve (deteriorate) earnings and cash flow generation.
ZAR/USD: Bushveld sells its products in USD but the majority of its cost base is denominated in rand. As a result, a weaker (stronger) rand could translate into better (worse) margins.
Power availability in South Africa: continued load shedding could impede Bushveld from reaching steady state production levels of 5,000-5,400mtV.