I mentioned this the other day in my post. It does indeed seem that low prices are key especially for the growth in VRFB. Stronger profits will come in the future from the vertical integration of the business and that is why it is so important for BMN and why Fortune keeps repeating the mantra.
Note for every 1GWh of VRFB, needs close to 5000 mtV! Potentially that is one project. Take the cost of the vanadium, the hardware, as well as the solar / wind aspect and these projects, are expensive. If the price is too high they will not proceed.
I think we should be very happy with today's pricing. Our cost is around $19 per kilo and we can sell at $35 to $40 per kilo. That is a very healthy margin in any buisness. But to increase profit you need to increase output and that ladies and gents is the plan! From 3200 mtV to 10,000 mtV but with added value through electrolyte and VRFB.
A very solid position to be in!
Numpty5, I am convinced too, that the company has had a strong hint is way beyond imminent and it will arrive in time for their needs. Yet again this project will provide more secure long employment and most of all contribute to SA GNP in a very positive way. For all investors it will be excellent news matched with the completion of the purchase on Vanchem it will lift Bushveld Minerals into the most enviable Vanaium business on the planet. There is already so much respect from the work that Fortune and Mikhail have done for the industry and they are seen as the benchmark to strive after.
Those investors here have the security of know they are invested in a company which not only has solid fundaments, a solid revenue stream, no debt but so much more growth to be unlocked it is one solid investment. (In my opinion!)
Hi James, I think the potential for Bushveld Energy is much higher than the estimation by SP Angel going forward. John Meyers team at SP Angel I think are focusing on the Vanadium and I am not sure how much they fully understand about the income stream from the Vanadium Electrolyte and the project attributions from the VRFB assembly.
The other question here which none of us can be sure of is how quickly Mokopane will be resolved and how quickly this ore can be mined and be able to be processed at Vanchem. If this is quick then the growth in profits through the global vanadium requirement for VRFB and electrolyte will dwarf the current global vanadium output used in the steel market. If we assume the miner Bushveld Vametco / Bushveld Mokopane get paid for there product in full, the electrolyte manufacturing selling price is covered paid in full and the leasing company pays this at market value then the income and profit stream could be much higher. It should be remembered that lower vanadium selling price is very important for the VRFB to establish quickly and the longer the V prices stay low the better this will be. I think we can expect to see our current clients supplied from Vametco for steel and all other product going into electrolyte and chemical applications as the market takes off.
There is a lot of items to click into place as you say but everything is looking very good indeed from what has been learned in the last 72 hours.
Northbank, glad the posts hit the spot. You can be sure that what I write I truly believe and the BE potential and the market opening up is truly incredible. What is more interesting still is the interest in VRFB technology is being picked up and the message is starting to hit home that energy providers need reliable technology with long life and the Lithium fire risk is a potential issue they don’t want to have to mitigate. This opens up the market to one very clear product and it will lead to a huge market for vanadium electrolyte.
That is very good news for Bushveld Minerals.
Ferro Vanadium 80% FOB (China) US$36.7/kg vs US$36.7/kg – Vanadium – vanadium-nitrogen production still sees healthy margins at current vanadium prices
Yesterday we reported that Vanadium nitrogen producers such as Bushveld Minerals with its Nitrovan product are seen as reluctant to sell at current prices suggesting the market may try to form a new floor at around current levels.
We understand that Bushveld still sees healthy margins at current prices and continues to sell into the market
Bushveld’s strategy is to keep costs as low as possible in the current volatile and lower price environment
Ferrovanadium prices are at $34.5-36.5/kgV in China and $31-32.kgV in Western Europe on Fastmarkets MB
Vanadium 80% FOB (China) US$36.7/kgV on Asian Metal via Bloomberg
Ninjamagic, 90p is based on today’s situation, imagine 1000 MWh Electrolyte production, multiple VRFB contracts, mining and processing 10,000 tonnes per annum, a new greenfield plant under construction, multiple electrolyte plants under construction in US, Europe and India, with ore also going directly to China to keep up with demand. Not just Vanadium but Iron ore also....
Bushveld Minerals looks like a multi billion £ business with expansion capacity to grow further.
Final valuations are hard to predict but way way higher than 90p is going to be seen!
Look Ladies and Gents, if you want to make a lot of money you need to work hard, create your own business and brand and make it successful, it is called ambition and reality. Examples are Amazon, Apple, Virgin etc
If you decide to try to beat the market and accelerate your wealth through smart investment rather than being a business genius, you need to research and find a company developing in a market which the world is currently asleep to, or doesn't understand for example: Vanadium Redox Flow Batteries (VRFB). The average person may say - a what?
Well, here on this board we have some idea!
1 - It is a battery system designed to store electrical current which has no limit in size apart from the size of the liquid tanks you store the electrolyte in
2 - That Electrolyte is made using water and vanadium and a few other additives
3 - The system is now known to work effectively for 30 years without loss of performance and no change in the amount of charge it can store over life
4 - It has no thermal runaway characteristics, in fact, it gets cooler when charging as opposed to getting warmer so it will not catch fire!
5 - It is safe to install in buildings or on large industrial or chemical plants
6 - Its long life and the fact that the electrolyte can be leased means the lifetime costs are exceptionally low compared to any other energy storage technology
7 - The electrolyte can be fully recycled into a new battery system or the vanadium can be extracted and used in other vanadium industries which are very useful as vanadium is a valuable mineral used in the steel and chemical industries
8 - Bushveld Minerals is situated on the worlds largest high-grade vanadium source in SA and they can extract and process the mineral ready for electrolyte production in their own plants keeping the cost exceptional low
9 - The technology is proven and in China alone there are already more than 3.3GWh of VRFB projects underway
10 - The global market for such a technology is off the scale if we take that an average country will need 200GWh of storage and they are quite a few countries in the world needing to install storage systems over the next 10 years!
11 - Vanadium is actually a very common element in the earth's crust so it makes sense to use it
So if you are wanting a solid investment opportunity, to grow your well-earned savings, and you are not Elon Musk or Richard Branson or a quiet undercover billionaire, this investment might be quite well worth researching.
Of course, investments are not guaranteed and they go up and down. Only invest what you could lose! But well-researched investments with exceptional fundamentals do tend to exceed most people expectations.
Not sure this will help, but you can research more at http://www.bushveldminerals.com/
It may be missed by some investors here the potential this division of Bushveld Minerals has, not only to grow very quickly but to take a huge amount of vanadium from our mine/mines. The global energy storage market is growing by the day and the numbers coming out are frankly huge. You should remember that for every 200MWh of Electrolyte required for VRFB's you need 1000 tonnes of vanadium! Now some of the VRFB projects around the world are already 800MWh and some larger ones are coming soon. many countries will need in excess of 200GWh of storage! Note: 1000MWh = 1GWh - That is 5000 tones of vanadium!
Now there is another very important point, newly installed batteries for these large applications need long life and they need to be safe without the risk of fire or explosion, let alone cooling systems to stop any thermal risk which makes them expensive.
So as you study our vanadium inventory and the work going on to build this company into a major player in a lost cost production environment it makes you think that the potential here will be limited only by our ability to grow. However, we have the ability to do this quicker than anyone else outside China due to our income and infrastructure.
This company is about to go into the big time and many people might just miss this and wonder who we suddenly took off from our current point. Well VRFB is about to come of age and the Lithium potential can stay focused on Mobile and Portable Storage, but you can be sure that VRFB will hold the most important key to stationary storage. Who you might ask is the froe front of the promotion of this technology our very of Bushveld Energy CEO Mikhail.
Piece this together with the leasing opportunity and the long life now expected to be towards 30 years and you have a compelling argument to dominate the energy storage market.
The market makers and shorters better get ready for some exciting news which may just help us to accelerate very quickly to our target broker price and beyond.
These are all my opinions, but the market is warming up and about to get hot. But our VRFB will stay cool and go on and on!
Not sure how excited I can get, but I really am!
I actually don't think soon, the steel and rebar market will matter to Bushveld as the market for VRFB will take all the vanadium that they can produce.
Ferro Vanadium 80% FOB (China) US$36.7/kg vs US$36.7/kg – Ferro-vanadium nitrogen producers stabilise prices as European consumers hold back in summer slowdown
Worsening sentiment towards construction activity in Europe may be holding back buying of ferro-vanadium in Western Europe.
Ferro-vanadium prices fell a further 5.6% in Western Europe last week to $31-32/kgV.
Prices also pulled back in China by 0.7% to 34.5-36.5/kgV.
China’s export price for vanadium pentoxide also pulled back this week after pulling back in China (Fastmarkets MB).
A cautious outlook by ferro-vanadium producers in relation to future orders from steel mills for hardened steel products has held buyers back
Fastmarkets assessed the export price of 98% V2O5 min, fob China, at $7.90-8.00 per lb on July 4, narrowing from $7.90-8.10 per lb in the previous week.
Vanadium nitrogen producers such as Bushveld Minerals with its Nitrovan product are seen as reluctant to sell at current prices suggesting the market may try to form a new floor at around current levels.
Demand for chemicals is reported to be good indicating that this segment should continue to pay good prices for vanadium products such as vanadium electrolyte for Vanadium Redox Flow Battery instillations.
On confirmation of:
1 - Vanchem purchase agreed and confirmed
2 - Bushveld Energy confirming construction starting on the Electrolyte plant in East London (SA)
3 - Bushveld Energy confirming their VRFB partnerships (yes plural)
4 - JSE Listing day
5 - Mokopane Licence announcement including vanadium and iron ore off take agreements
6 - Vametco upgrade to next level
7 - Vamchem upgrade program
8 - First VRFB order in SA (apart from Vametco)
9 - Opening of Bushveld Energy production facility
10 - Commencement of mining operations at Mokopane
These are all major milestones and each will impact the growth of the business.
The order may change but these are all SP drivers.
There is no doubt Ophidian that the car market situation is not helpful. This time of confusion to which type of car to purchase for may is holding people back. I expect to see a lot of good finance deals coming soon to entice people to get into new cars and lift the market again. Cars built with vanadium in the steel structure clearly are going to be lighter as they can have more strength. However, more manufacturers are using bonded aluminum and carbon fibre. But EV,s have mainly steel as they need strength in the chassis and crash structure for good reason. So hopefully the car market will get through this flux and they will be more clarity for the car buyer and hopefully more affordable EV's with good range and more accessible charging network.
I am still focused on the VRFB market as I think this is still where BMN's focus should be.
I don't think there is anything to be concerned about here RRR.
This company has laid some incredible foundations to set them apart from other Vanadium Miners and Processors and they are doing everything to set this market alight. Don't forget that Mikhail the CEO of Bushveld Energy is leading the Vanitec conference this week in Lyon. He knows the market inside out and Bushveld Energy is set to open their Vanadium Electrolyte plant next year just at the time when the VRFB market contracts will be ready to be placed. It is about being in the right place at the right time. Not only that but there are multiple VRFB manufactures in the world who need to be supplied with electrolyte. Confidence in the supply market will open up. Then consider that Bushveld has progressed on the Vanchem project which they have purchased to be ready to take supply from Mokopane. They would not have done this if they weren't 99.9% sure that it was going to happen.
The steel market may be in a pause in Europe but the global position is strong and they will need vanadium, but be sure the market for Vanadium in VRFB is very quickly going to exceed the demand in steel and that market is likely to be much larger. there is already news coming out of the Vanitec meeting that VRFB technology can reach 30-year life. Compared to Lithium Ion at 10 years once the market sees this news there will be more and more opportunities for Vanadium. No other investment in Vanadium in the world offers such a massive upside.
So just because many of the long term holders are not posting as much at the moment does not mean they have gone away. You can be sure as soon as there is more news flow, we will all be back commenting and opening up the meaning of the news. We know for certain that posters on this board hold well over 10% of the shares and maybe up to 40%.
So hold on in there and if you feel it is appropriate to add some more to your portfolio! You may come "SuperRich" rather than just Really!
Iron ore 62% Fe spot (cfr Tianjin) US$116.0/t vs US$116.0/t – Prices are off on a report that the Chinese steel lobby urged the government to control the price of iron ore that surged to a five-year high on a supply squeeze.
The China Iron & Steel Association “is reporting relevant problems in the industry to government ministries and regulators, urging a stronger investigation and supervision to maintain normal iron ore market order,” Vice Chairwoman said at a conference in Shanghai.
The association wants to see prices back at “reasonable levels”.
Iron ore is off as much as 6.2% to $107.2/t on the Singapore Exchange today after hitting a five-year high on Monday.
I hear that Bushveld Minerals are going to build South Africa's answer to the Gigafactory, but for stationary storage Vanadium Redox Flow Batteries.
This will create new jobs and a special industry for South Africa so that renewables can take over from coal as the primary electricity supply for the continent starting with the 1000MWh electrolyte plant.
This is exciting news!
While there are other battery solutions on offer, many of these suffer from high parasitic losses, high component renewal costs or increased risk of outright failure leaving VRFB’s as the preferred grid-scale storage solution for power utilities.
ADROIT market research forecast CAGR growth of 8.3%pa for grid power storage in Europe to hit $1.11bn by 2025 with VRFBs expected to account for 83.8% of the total market share.
Bushveld Energy aims to participate in 1,000 MWh of opportunities in Africa by 2020 and there is sufficient current demand in the market for vanadium electrolyte to support the installation of a 200 MWh capacity facility in South Africa.
We have cautiously assumed a more modest market of just 300,000MWh in 2021 and for Bushveld to be involved in the development of around half the VFRB instillations and electrolyte sales.
Bushveld’s current VRFB jv is being trialed at ESKOM should have a peak output of 450kWh as a single unit. It should be relatively simple to roll out multiple units to support the rapid growth in wind and solar farms being installed in South Africa as ESKOM moves to supplement its ageing coal-fired infrastructure.
Valuation: we value Bushveld Energy at US$149m representing 8.8 pence per share to our valuation on Bushveld Minerals. We have added 7.93p/s for Bushveld’s other assets, cash and subsidiaries including Lemur and the P-Q Iron and Titanium project. Our revised ferro-vanadium price forecast adjusts our valuation for the Vametco-Vanchem vanadium business to £801m representing 72 pence per share.
Conclusion: Bushveld is extraordinarily well placed to participate in the high-tech Vanadium Redox Flow Battery business. The integration of the business to produce vanadium electrolyte from its in-house vanadium feedstock gives its security of supply, while the new and innovative lease-finance model for the vanadium in electrolyte should make the financing of VRFB’s less sensitive to spot vanadium prices. We see this as a major advantage for Bushveld placing the company at the very centre of this valuable growth market.
Bushveld’s location in South Africa should also help in the participation of a World Bank funded ESKOM renewables Support Project which is designed to facilitate accelerated development of large scale renewable energy capacity in support of the long-term carbon mitigation strategy of South Africa.
Bushveld Minerals* (BMN LN) 24p, Mkt Cap £269m – Vanadium rental / leasing structure to accelerate value creation. Vanadium forecasts adjusted.
(Bushveld Minerals owns 74% of Vametco, 84% of Bushveld Energy in South Africa, 100% of Lemur Holdings, 9.5% of Afritin)
(Vanchem: Our figures assume Bushveld completes the acquisition of Vanchem later this year)
BUY – Valuation 90p
We are adjusting our valuation in Bushveld Minerals following our review of value offered by the new Vanchem business, Bushveld Energy and the other business units.
We have also adjusted our assumed vanadium price forecasts to account for the recent price correction.
Bushveld Minerals recently announced it is to acquire the operating Vanchem vanadium business in South Africa, a move which should bring low-cost expansion and greater flexibility to the group.
Bushveld agreed to pay US$68m to acquire the Vanchem plant and facilities to be settled in two stages. US$6.8m was paid on 30 April 2019, US$61.2m will be settled no later than 31 October plus a 12 month period after completion of the Transaction. A further US$0.5-1m will be paid to VVP, which provided services to Vanchem.
Vanchem is currently producing around 80mtV of vanadium per month but is also in Business Administration in South Africa. This is similar to being in Administration in the UK though the process appears to be more helpful to the longer term operation of businesses than our own medieval system.
Vanadium price assumption:
We are pulling back our Ferro-vanadium price forecasts for 2019 to $50/kgV from $60.4/kgV in response to the fall in ferro-vanadium prices to around US$36/kgV FOB China. For 2020 we assume $45/kgV and we maintain our longer term price forecast at $45/kgV.
We still see vanadium demand and prices rising in China in response to better compliance with the legislation introduced in November last year.
Demand for vanadium electrolyte for Vanadium Redox Flow Batteries VRFBs should also come into the market to support our estimate price assumptions.
While demand for vanadium for electrolyte may be price sensitive we see the invention of new lease finance structures for the vanadium in VRFB’s as enabling the financing of VRFBs at higher vanadium price levels going forward.
Bushveld Energy: Bushveld’s vanadium rental financing service should accelerate the planning and ordering of new VRFB systems to support South Africa’s power grid.
Critically it should reduce the cost of financing and spread the cost of the vanadium in the electrolyte over a longer period rendering the cost of vanadium less critical.
We are raising our valuation for Bushveld Energy to US$149m as we see the ‘VRFB’ business as offering a practical solution for the storage of growing solar and wind power in South Africa. This assumes a relatively low margin on electrolyte sales for VRFB batteries and a more normal project finance type cost for VRFB unit sales.