The focus for our company going forward is increasingly going to be the vanadium platform,” says Fortune Mojapelo of Bushveld Minerals (LON:BMN)
“There are four key elements to this. The first is getting the pre-feasibility study completed at the Vanadium project in South Africa.
“The second is that we’re looking to get cash flow early either through selling concentrate to the market or through the acquisition of existing brownfield infrastructure.
“The third is that we’d look to support demand in the energy storage market. And the fourth is the possibility of consolidating vanadium plays locally.”
The pre-feasibility has been a work in progress for a little while now, and the market is anticipating that the results should be out within the next month or two.
Mojapelo won’t be drawn on the precise timing, but he will share his optimism as to the results.
“At the moment we’re quite happy with the progress,” he says.
The next step will be to organise finance for the bankable study that looks sure to follow.
“We’re talking to different people about that,” says Mojapelo. “We believe we’ve done enough work to find a partner.”
The key to it all really is the outlook for the vanadium market.
This isn’t something that hits the headlines a great deal, and especially not in the current climate when even the most liquid and widely used metals are out of favour.
But vanadium is something of a special case. It’s needed in steel, and although steel consumption overall has fallen, at least in reference to China, the slowdown in demand for the high quality steel that receives its strength from its vanadium content is likely to be much slower.
Indeed, there is a case to be made that there won’t ultimately be much of a slowdown at all, as much of China’s lower quality steel, used in the rush and enthusiasm of the earlier growth spurts there, now needs to be replaced with higher quality more durable material.
That’s one reason why Mojapelo is relatively sanguine about recent price weakness.
“Yes, we know it’s come off,” he says. “But we don’t expect to see it collapse.”
And then he mentions energy storage.
This is the longer-term bull case.
Vanadium has great potential as the central element in energy storage solutions that Mojapelo only sees increasing in demand as coal and other forms of fossil fuel-related power generation go out of style, and more intermittent renewable forms of generation, such as wind and solar come in.
For the times when the wind isn’t blowing or the sun isn’t shining, grids, cities and whole economies will need to draw on stored energy. And that energy, he says, will be stored in vanadium batteries.
We’re not there yet, but we’re on the way.
In the meantime though, Bushveld needs to make its vanadium project economic in the current market.
And Mojapelo is comfortable that a clear focus on keeping costs down is the key to doing that.
The price upside he bats away for another day.
“The one thing you can focus on is cost,” he says. “If you’re in the first quartile or second quartile you’re fine even during periods of price weakness and your price upside isn’t going to fall through short-term vanadium weakness. So that’s all we focus on. We make sure that our project is the cheapest.”
Exactly how cheap will become clear within the next few weeks, with the release of the pre-feasibility study.
That study will also show what sort of a position of strength Bushveld will be able to occupy as it looks around for expansion opportunities.
“We have been in conversations with potential off-takers in regard to our production of concentrate,” says Mojapelo. “But a lot more of our focus has been to look at existing infrastructure. We have identified a number of existing opportunities.”
The company’s freedom to manoeuvre will certainly be greater now that it is coming to the end of the lengthy process by which it has increased its majority stake in Australian-listed Lemur Resources (ASX:LMR) to 100% control.
That deal serves as a reminder that ultimately there is more to Bushveld than just vanadium. There’s tin, coal, titanium and iron ore too.
But Mojapelo is keen to keep the spotlight on the vanadium flagship as the pre-feasibility results near.
“For a team of our size, you do need to pick what’s most important,” he says.
And, after all, it’s in vanadium that Bushveld really leads the pack.
“We have the most extensive database of anyone on vanadium on the Bushveld Complex in South Africa, which accounts for a great majority of the world’s primary vanadium production and is host to the second largest vanadium reserves globally,” continues Mojapelo.
So if there is consolidation to come, you can be sure that Bushveld will be right in the thick of it.