Roskill view: The Mapochs mine in South Africa will be auctioned on September 14th in a move that could have significant consequences for the vanadium market.
The mine was previously operated by Evraz Highveld, a major producer of vanadium feedstock until 2015. In Q2 that year, Evraz Highveld announced it had filed for a voluntary business rescue and the operation subsequently closed in Q3. The company attributed the closure to historical operational difficulties and sustained financial losses within a capital constrained operating environment.
The Mapochs mine is an open-pit mine near Roossemekal, 180km east-northeast of Pretoria in Mpumalanga province. The mine exploited seams of titanomagnetite to produce approximately 2Mtpy of lump and fines ore. Total production at the mine was estimated at 11.0kt contained vanadium in 2014, more than 10% of global feedstock output. As such, a restart at Mapochs would have a fundamental impact on global vanadium supply.
It is unclear how, if the mine restarted, vanadium units would make their way to market. That will depend on the successful bidder. Under its former operator, the mine formed part of a vertically integrated steel and vanadium slag production unit. Evraz Highveld’s operations comprised steelworks at Emalahleni (Witbank) as well as the Mapochs mine. Lump ore was processed in the Witbank steel plant and ore fines were processed in the Vanchem vanadium plant as a blend with vanadiferous slag from Highveld steelworks. Steel production resulted in the production of a vanadium-rich slag which was as principally supplied to Vanchem in South Africa, owned by Duferco, and Hochvanadium in Austria, operated as a joint venture between Evraz Highveld and Treibacher. Vanchem was a minority owner of Mapochs (35%), and blended Highveld slag with ore fines. Hochvanadium supplied vanadium slag to Treibacher (also in Austria) for further processing.
At this stage, it is not clear who might bid for the asset. It has been reported that Hong Kong-based International Resources (IRL) may bid for the mine again. A 2015/16 bid from IRL to purchase the asset was unsuccessful. Likely additional suitors might include other domestic vanadium players such as Glencore and Bushveld Minerals or perhaps vanadium consumers looking to guarantee feedstock. Vanadium prices have risen considerably in recent months owing in part to vanadium feedstock tightness in China which could mean that Asian entities other than IRL look to acquire the mine.
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