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Bushveld Energy on track to become one of the largest electrical energy storage providers in Africa

Electrical energy storage is set to be a huge market globally, and Bushveld Energy is well positioned to take a leading role in Africa
Bushveld Energy on track to become one of the largest electrical energy storage providers in Africa
In a vanadium redox battery, power is stored inside a liquid

“Is energy storage going to be a big thing? The answer to the question is very much yes.”

So says Mikhail Nikomarov, chief executive of Bushveld Energy, itself an 84%-owned subsidiary of Bushveld Minerals Ltd (LON:BMN).

READ: Busvheld Minerals benefiting significantly from stronger ferrovanadium price

At the moment, Bushveld Energy is playing something of a second fiddle to the other Bushveld subsidiaries, in particular Bushveld Vanadium, which is now moving to become a key market supplier of vanadium, and AfriTin Mining (LON:ATM), which has embarking on a new existence as a semi-independent company following its Aim listing back in November 2017.

But Nikomarov has big plans.

The Bushveld Energy subsidiary is all about providing expertise, know-how and capacity in the most rapidly growing market for vanadium, be it vanadium produced by sister company Bushveld Vanadium, or vanadium sourced elsewhere.

How large is this market?

It’s big.

“The two largest batteries in construction in China are vanadium,” says Nikomarov.

“And the construction of just one of them will require between four and five per cent of global vanadium supply. So two or three batteries could certainly move the needle on the mining side.”

The stated aim is to make Bushveld Energy one of the largest electrical energy storage providers in Africa by 2020, which for the clock-watchers amongst you, is less than two years. Given that Bushveld estimates that the addressable market in Africa could be worth between US$25bn and US$30bn, that’s quite some undertaking.

And it also makes clear why Nikomarov’s plans to make Bushveld Energy a much more significant company inside the Bushveld stable could really come to something.

Nikomarov is certainly a believer. He made the jump to Bushveld back in 2015, following talks with Fortune Mojapelo, the chief executive of the Bushveld parent.

The initial connection was made through the McKinsey consultancy, for which both Nikomarov and Mojapelo have both worked at certain times, although before they teamed up at Bushveld not together.

The deal they’ve got together is certainly one with the fingerprints of consultants on it - Nikomarov has ensured that he has skin in the game himself, holding the 16% of Bushveld Energy not held directly by Bushveld Minerals.

But that’s all to the good. It ensures that both sides are motivated, and that Nikomarov is likely to be rewarded if he makes good on his ambition.

“My ambition is to make Bushveld Energy the most important part of the business,” he says.

“It may never have 450 people in it as the vanadium mine does – it’s not that labour or capital intensive. But in terms of value creation for shareholders it could become the most revenue generating. The upside in energy is so much higher.”

It’s hard to say just how much of Bushveld Minerals’ £112mln market capitalisation is accounted for by Bushveld Energy at the moment. But that calculation is likely to become increasingly easy to make in the coming years, and the effect on the Bushveld share price is likely to be salutary as that process unfolds.

 

 

 

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