TIDMBMN
RNS Number : 8844I
Bushveld Minerals Limited
29 November 2018
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
29 November 2018
Bushveld Minerals Limited
("Bushveld Minerals" or the "Company")
Bushveld Energy Q3 Operational Update
Bushveld Minerals is an (AIM: BMN), the AIM listed, integrated
primary vanadium producer with ownership of high grade vanadium
assets, is pleased to provide an operational update for its
84%-owned energy subsidiary, Bushveld Energy Limited ("Bushveld
Energy").
Q3 Highlights
-- Preparatory work for the completion of battery commissioning
for the Eskom vanadium redox flow battery ("VRFB") project
recommenced at site and is expected to complete in December
2018;
-- Bushveld Energy and UniEnergy Technologies ("UET") awarded
grant by the United States Trade and Development Agency ("USTDA"),
in support of the Eskom project and energy storage industry in
South Africa;
-- Environmental Impact Assessment ("EIA") for East London
Industrial Development Zone ("ELIDZ") electrolyte production
facility has commenced and is expected to be completed in H1
2019;
-- Discussions with potential electrolyte customers ongoing with
Bushveld Energy expecting to supply samples in coming months.
Mikhail Nikomarov, CEO of Bushveld Energy, commented:
"The third quarter of this year and events following immediately
afterwards, have proven beyond doubt that the market for battery
storage in both South Africa and Africa overall is significant and
immediate. Bushveld Energy has long maintained the attractiveness
of this market, especially for the long-duration and high-volume
daily utilisation applications that are ideal for VRFBs. The
knowledge gained by our team in deploying a system with Eskom and
designing and building an electrolyte facility will continue to
give Bushveld Energy a competitive advantage in supplying into this
growing market. Our business plan, anchored in a low cost scalable
primary production platform, will allow us to maximise value for
Bushveld and its shareholders along the VRFB value chain, and
therefore realise the Company's vision of a deeply vertically
integrated vanadium platform."
Operational highlights for Bushveld Energy projects:
Eskom VRFB project
Preparatory work for the completion of battery commissioning for
the deployment of the maiden VRFB from UET with the national
utility, Eskom, in South Africa recommenced at site and is due to
be completed before the start of the South African holidays in
December 2018. The system is co-owned by Bushveld Energy and the
Industrial Development Corporation ("IDC").
The delay from the original timeline for the project, which saw
delivery of hardware at the end of Q2 2018, resulted from the
unexpected contamination of the electrolyte that occurred during
the filling stage, which was discovered during system commissioning
that made the VRFB inoperable. Without a mixed-acid electrolyte
facility in South Africa, filtration of the electrolyte in-country
was not possible. A remediation strategy was implemented in August
2018 to replace the electrolyte and certain contaminated components
of the system. Site work for remediation began in October 2018 and
commissioning restarted at the end of November 2018.
The USTDA awarded a grant to UET and Bushveld Energy in support
of the Eskom project and the development of future applications for
energy storage and VRFBs in South Africa. USTDA's approval process
included external technical verification of the technology and the
proposed project, indicating confidence in the long-term viability
of both UET's technology and expected opportunities for energy
storage in South Africa.
Electrolyte production facility
The EIA process for the ELIDZ site is advancing with completion
expected in the first half of 2019. This process needs to be
completed before the construction of the electrolyte facility
commences.
Test work on the project has been performed by two external
parties in the conversion of vanadium feedstock from Bushveld
Vametco into vanadium electrolyte, yielding positive results for
both single and mixed-acid electrolytes. The results are
preliminary; however, Bushveld Energy expects to be able to start
supplying electrolyte samples to potential customers in the coming
months. These activities are important in verifying Bushveld's
objective of using an intermediary vanadium product from its mining
and processing activities to reduce the cost of conversion into
electrolyte. Such efforts are an example of the merits of
Bushveld's vertically integrated strategy.
The detailed process design within the facility will follow the
process flows created through the aforementioned test work. The
capital expenditure required to build the electrolyte plant is
approximately $10 million.
Post Q3 activities - market development
In October 2018, the World Bank Group announced a $1 billion
programme to support the deployment of energy storage in low to
middle income countries. The programme is expected to mobilise a
further $4 billion in donor funding and private sector investment
to deliver 17,500 MWh of energy storage in these countries by 2025.
This announcement is not only an excellent development for energy
storage globally, but for Bushveld Energy and its market focus on
Africa. With typically over 1/3 of World Bank Group funding
directed to sub-Saharan Africa, the programme will likely aim to
deliver 5,000-6,000 MWh of storage in Africa alone, or an average
of 1,000 MWh per year. Similarly, most of the storage deployed for
future projects under the programme will be to ensure greater
integration of renewable energy, applications that require long
duration, daily storage, which fits into the technical and
commercial superiority of the VRFB technology;
In August 2018, the South African Department of Energy (DoE)
issued a draft Integrated Resource Plan ("IRP") for South Africa.
As a member of the South African Energy Storage Association
(SAESA), Bushveld Energy supported SAESA's engagement with the DoE,
including formal commentary on key topics. Three key topics
included:
i. to ensure that energy storage facilities do not require generation licences;
ii. to permit technologies such as energy storage to replace
allocations for other technologies, such as 9,000 MW of natural gas
capacity for peak-time generation, where storage is able to provide
the same system benefits at equal or lesser cost; and
iii. to ensure that energy storage co-located with generation
facilities does not lead to double counting of capacity and only
the net output capacity of such co-located facilities or mini-grids
is calculated.
The commentary period ended in October with the final IRP
expected in early 2019, leading to significant advancement for the
South African power sector, including energy storage.
Post Q3 activities - overview of Bushveld Energy Business
Plan
The business plan for Bushveld Energy focuses on five types of
revenue-generating activities in the midstream and downstream
segments of the vanadium value chain. These activities have a low
capital requirement relative to the mining business. These five
activities broadly include:
1. Electrolyte manufacturing, including building and operating a
chemicals plant that purifies vanadium feedstock and converts it
into a liquid electrolyte. The electrolyte is sold to VRFB
companies or direct users / buyers of VRFB systems;
2. Renting (or leasing) vanadium electrolyte, which is a new
product under development. In the product, Bushveld Energy can
retain ownership of electrolyte and rent it to the VRFB user. The
product is unique to VRFB energy storage technology and essential
not just to cover vanadium price peaks, but to also implement a
long-term pricing strategy which reduces the upfront capital cost
to make VRFB one of the most commercially competitive energy
storage technologies in the market;
3. Assembly of VRFBs through an investment in the construction
of an assembly plant for a VRFB product (that will be operated by
another party). This activity could involve direct investment into
a VRFB company or companies that would own the facility as well as
the technology;
4. Direct selling of VRFBs in African markets as a value-adding
local firm. In addition to identifying opportunities suitable for
VRFB energy storage, this activity includes developing local
logistics chains covering importation, transport, installation and
maintenance of the VRFBs and key components (e.g. electrolyte);
5. Developing and investing in African energy storage projects,
which goes beyond purely identification of suitable sites and
extends to defining the economic business case for VRFB
installations. The activity also includes designing the technical
and commercial structure of projects that use VRFBs. Finally, the
activity includes direct equity investment into such projects.
Implementation of these five activities will continue to follow
principles of strategic partnerships and implementation only where
value can be created. Implementation of many of these activities
will be done in collaboration with external parties, including
development agencies, funders, renewable energy developers and
energy storage component providers. By design, all activities will
rely to a significant degree on capital from outside of Bushveld
Minerals.
Summary of Future Objectives
Objective Status
Deliver the first VRFB project On-track for battery to be operational
with Eskom in CY 2018 initially by end of 2018
----------------------------------------------------
Grow the VRFB project pipeline On-track
across Africa
----------------------------------------------------
Supply electrolytes to downstream On-track
stakeholders in the Vanadium
Battery Supply Chain
----------------------------------------------------
Develop an electrolyte manufacturing On-track
plant, with minimum capital
expenditure
----------------------------------------------------
Design and implement a vanadium Initiated
electrolyte rental product to
reduce upfront costs of VRFB
and accelerate adoption
----------------------------------------------------
Enquiries: info@bushveldminerals.com
Bushveld Minerals +27 (0) 11 268 6555
Fortune Mojapelo, Chief Executive
Officer
Chika Edeh, Head of Investor
Relations
SP Angel Corporate Finance
LLP Nominated Adviser & Broker +44 (0) 20 3470 0470
Ewan Leggat / Richard Morrison
Jonathan Williams / Richard
Parlons
Alternative Resource Capital Joint Broker
Rob Collins +44 (0) 207 186 9001
Alex Wood +44 (0) 207 186 9004
Tavistock Financial PR
Charles Vivian / Gareth Tredway +44 (0) 207 920 3150
Lifa Communications Financial PR (South Africa)
Gabriella von Ille +27 (0) 71 112 1907
ABOUT BUSHVELD MINERALS LIMITED
Bushveld Minerals is a low cost, integrated, primary vanadium
producer, with ownership of high grade vanadium assets.in.
The Company's flagship vanadium platform includes a 74%
controlling interest in Bushveld Vametco Alloys (Pty) Ltd a primary
vanadium mining and processing company; the Mokopane Vanadium
Project and the Brits Vanadium Project.
Bushveld's vision is to become a significant, low cost,
integrated primary vanadium producer through owning high grade
assets. This incorporates development and promotion of the role of
vanadium in the growing global energy storage market through
Bushveld Energy, the Company's energy storage project developer and
component manufacturer. Whilst the demand for vanadium remains
largely anchored in the steel industry, Bushveld Minerals believes
there is strong potential for an imminent and significant global
vanadium demand surge from the fast-growing energy storage market,
particularly through the use and adoption of Vanadium Redox Flow
Batteries.
While the Company's focus is on the vanadium operations and the
development and promotion of VRFBs it has additional investments in
coal, power and tin.
The coal platform comprises the wholly-owned Imaloto Coal
Project, which is being developed as one of Madagascar's leading
independent power producers. The Company's tin interests are held
through its shareholding in AIM listed AfriTin Mining Limited.
The Company's approach to project development recognises that,
whilst attractive project economics are imperative, they are
insufficient to secure capital to bring them to account. A clear
path to production within a visible timeframe, low capital
expenditure requirements and scalability are important factors in
ensuring a positive return on investment. This philosophy is core
to the Company's strategy in developing projects.
Detailed information on the Company and progress to date can be
accessed on the website: www.bushveldminerals.com.
About Bushveld Energy Limited
Bushveld Energy Limited is an energy storage project developer
and component manufacturer focusing on the African market, with
registered offices in Mauritius and a wholly owned subsidiary in
South Africa. Bushveld Energy recognises that electricity in Africa
intersects paramount potential for social transformation with an
immense commercial opportunity.
Launched in 2016, Bushveld Energy is focused on developing and
promoting the role of vanadium in the growing global energy storage
market through application in vanadium redox flow batteries. Its
near term strategy is to deploy several VRFB systems as part of its
longer term vision to become a significant electricity storage
provider in Africa by 2020, meeting the demand for utility scale
energy storage in Africa by leveraging South Africa-mined and
beneficiated vanadium.
http://www.bushveldenergy.com
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END
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