In a statement, the firm said Vametco's production of 2,833mln tonnes of vanadium (mtV) in 2019 was up 11% on the previous year, helped by fourth-quarter production of 880 mtV that was up 57% on the prior quarter and 24% year-on-year.
With underlying production cash costs for the year falling 5% to U$18 per kg, but vanadium market prices declining over the year such that selling prices fell 35%, Bushveld generated an underlying profit (EBITDA) of US$42mln compared to US$101mln last time.
Staying EBITDA-positive despite the fall in market prices was thanks to the implementation of productivity initiatives identified as part of last year’s ‘transformational programme’, said chief executive Fortune Mojapelo.
“We expect to see additional benefits realised and improved operational stability at Vametco during the course of 2020.”
Bushveld pointed out that vanadium prices, especially in Europe, have begun to recover from the lows around US$22/kgV seen in December, with recent trades at around US$27/kgV.
Mojapelo hailed November’s completion of the Vanchem processing plant acquisition as “transformational” by providing the “diversification and operational base to achieve our near and medium-term growth plans” and means Bushveld owns half of the world’s four operating primary processing facilities.
For 2020, Vametco is expected to increase production volumes by 6%-13% to 3,000-3,200 mtV, with volumes weighted towards the second half, with cash costs predicted to fall 2%-5%.
The addition of Vanchem should lead to the production of a further 960-1,100 mtV from stockpiles and allow Vametco to begin ferrovanadium production via the processing facility.
Mojapelo said: “We will make sure that we will continue to be conservative in how we invest capital and ensure that any production increase is profitable, especially while the current price environment prevails.”
After technical progress for downstream vanadium-based battery business Bushveld Energy in 2019, Mojapelo said the priorities for the coming year were to add further manufacturing partners for vanadium redox flow batteries (VRFB), deliver a Vametco mini-grid as a funded independent power producer, and to submit bids for battery energy storage systems opportunities as part of South Africa's Integrated Resource Plan.
“Investing in the development and deployment of VRFB technology is a key part of Bushveld's strategy for two key reasons,” he said.
“Firstly, it will assist to increase the scale of adoption of VRFBs, which will increase demand for vanadium. Secondly, it provides a natural hedge for the company against vanadium price volatility.”