Vanadium: Bushveld Minerals to acquire Vanchem Vanadium Products assets

Bushveld Minerals Vanadium Mine

Bushveld Minerals has entered into an agreement with Vanchem Vanadium Products to acquire its vanadium assets in South Africa for US$68M.

Roskill view

This is a positive step for Bushveld as it advances towards its publicly stated aim to become a 10ktpy vanadium producer. In the short term, it offers additional output and product diversity. With regard to the former, Vanchem is currently producing roughly 100tpm of vanadium pentoxide from stockpiles at Mapochs. Bushveld suggests that these stocks can last for one year. Regarding the latter, Vanchem (through several entities) can produce chemicals (vanadium trioxide and pentoxide) and ferrovanadium. With Bushveld already producing Nitrovan at Vametco, the company now has a broad suite of products.

In the longer term, Bushveld believes that a US$45M refurbishment could see the facility produce 4.2ktpy of vanadium. This will require more feedstock and it appears that Bushveld has earmarked its (64% owned) Mokopane project as the solution.

Mokopane is 200km away from Vanchem but has reported ore reserves of 29.8Mt from a resource of 298Mt. Plans previously involved a 1Mtpy run-of-mine operation (over 30 years) and a vanadium pentoxide plant producing on average 5.5ktpy V; however, this would have required just shy of US$300M CAPEX.

The Vanchem acquisition has likely reduced the capital requirements for Bushveld to increase its production. Bushveld notes that the lead time for development of basic crushing, mining and screening would be short and CAPEX is estimated by Alternative Resource Capital (of whom it must be noted Bushveld is a broking client) at US$20M. Thus, it is conceivable that Bushveld develops mine and plant for less than US$100M CAPEX.

Roskill’s NEW report, Vanadium: Market Outlook to 2028, was published in March 2019. Click here to download the brochure and sample pages, or to access further information.