Bushveld Minerals Limited (LON: BMN) has doubled its vanadium processing capacity in South Africa with the acquisition of Vanchem for US$68mln.
Fortune Mojapelo, chief executive, said the deal cements Bushveld’s position as a leading global vanadium producer.
“We consider ourselves the ideal buyer for these businesses.”
Vanchem’s processing plant is 200Km away from Bushveld’s own Mokopane project, which will be the primary source of ore.
Refurbishing the three kilns at the facility will cost an additional US$45mln and when finished will more than double Bushveld’s processing capacity to over 8,000mtV per year.
This takes Bushveld a substantial way towards its target of 10,000 mtV per year, added Mojapelo.
A further US$20mln is required to develop Mokopane.
“This highly strategic transaction combines our existing portfolio of high-grade low-cost primary vanadium resources, including the Mokopane greenfield deposit, with an established production facility,” said Mojapelo.
“This substantially reduces the capital required to bring the Mokopane Project into production, while also bringing it online in a much shorter timeframe than if we were to construct a new plant.
Vanchem’s three-kiln configuration gives its production flexibility, while its chemical products also complement the electrolytes for vanadium redox batteries being developed by Bushveld's battery arm.
“This chemical capability will be particularly key as the company grows its exposure to the emerging stationary energy storage industry," said Mojapelo.