TIDMBMN
RNS Number : 9569R
Bushveld Minerals Limited
01 November 2019
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
1 November 2019
Bushveld Minerals Limited
("Bushveld Minerals" or the "Company")
Strategy for partnering with Vanadium Redox Flow Batteries
companies
Bushveld Minerals Limited (AIM: BMN), the AIM quoted, integrated
primary vanadium producer, with ownership of high-grade vanadium
assets in South Africa ("Bushveld"), is pleased to communicate and
outline in greater detail its previously announced strategy for
partnering with, and investing in, vanadium redox flow battery
("VRFB") companies. Implementation of the strategy is led by
Bushveld Energy, Bushveld's 84% owned subsidiary, focused on three
business lines covering vanadium electrolyte, VRFB manufacturing
and VRFB deployment.
Highlights
-- Bushveld announces its intention to establish a VRFB
Investment Platform ("VIP") to lead investments in VRFBs, original
equipment manufacturers ("OEMs") with attractive upside potential.
The VIP is one of multiple avenues of partnering with OEMs.
-- The Company and its initial investment will play a catalyst
role and mobilise additional capital from third party funders to
establish an investment capital pool to support VRFB OEM
growth.
-- These partnerships support Bushveld Energy's business model,
that includes electrolyte, VRFB manufacturing and deployments.
-- Today, separately, Bushveld announced an investment into the
proposed merger of redT Energy and Avalon Battery, in line with
this strategy.
-- Bushveld Energy is now in an even stronger position to
capitalise on the VRFB market dynamics given its knowledge of the
vanadium market, first-hand battery expertise and strong
relationships across the industry.
Strategic rationale
Bushveld Minerals believes that VRFBs, with their long lifespan,
intrinsic safety and scalability, among other benefits, are well
placed to capture a significant share of the long duration
stationary energy storage market.
Bushveld Energy was established with the objective to drive
adoption of VRFBs in the energy storage market to:
-- Create significant upside for vanadium demand;
-- Provide a natural hedge to vanadium price volatility; and
-- Deliver an additional compelling commercial opportunity for the Group and its shareholders.
Combining these benefits with low cost upstream vanadium assets,
uniquely positions Bushveld to create additional value through
vertical integration.
Clear strategy to partner with VRFB companies
VRFB OEMs are the critical drivers for the success of the VRFB
technology and vanadium demand in energy storage. A key activity
for Bushveld Energy is developing partnerships with VRFB OEMs that
can take the form of multiple structures, including:
-- Establishment of a new VRFB Investment Platform ("VIP") to
make strategic investments directly into VRFB OEMs that offer
strong growth upside and provide potential off take for Bushveld's
vanadium products. The VIP will leverage Bushveld Energy's
expertise in the energy storage market, its capacity to ramp up
vanadium supply and its capital investment to attract additional
external funding into the VRFB OEMs and the industry. Bushveld's
role would be that of a significant minority investor, with
strategic involvement such as vanadium sourcing, while keeping the
day-to-day operations in the hands the management team. The Company
intends to leverage its initial capital commitments by mobilising
additional third party capital to create sufficient capacity to
play a meaningful role in scaling up VRFBs manufacturing
capacity.
-- Supply contracts for vanadium material, vanadium electrolyte
and vanadium electrolyte rental. Bushveld has already been
supplying sample materials to multiple OEMs;
-- Joint development of region or project specific business
models for vanadium electrolyte rental. Bushveld enabled the
successful deployment of a vanadium electrolyte product in
industrial-scale batteries developed and sold by Avalon
Battery.
-- Joint development of large potential customers or projects
well-suited for VRFBs. This includes the work showcasing the
technology at the Eskom Research & Testing facility in South
Africa.
By partnering with different VRFB companies, Bushveld can
diversify its vanadium customer base and support various
technologies, maximising its exposure to VRFB upside potential. In
the medium term, the increased diversification of vanadium demand
from the energy sector may also lead to an overall decrease in
vanadium's price volatility. Additional details of the VIP will be
provided in due course.
Favourable market dynamics
Medium- and long-term trends continue to reinforce the strong
potential of the stationary energy storage market, especially
VRFBs. Energy storage is needed to stabilise and make variable
generation from solar and wind dispatchable, therefore a key
element in the shift towards increased renewable energy sources.
These trends are reinforced by the following trends:
-- The stationary energy storage market is forecast by Navigant
Research to grow at a rate of 58% p.a., exceeding 100GWh and US$50
billion annually by 2027. Technology companies with direct IP will
capture a large portion of the value created within the energy
storage sector;
-- 90% of the market will be dominated by long duration use
cases, including transmission and distribution asset optimization
and peak load support, requiring four or more hours of storage;
-- VRFBs are competitive for long duration applications, with
Navigant forecasting flow batteries to capture 18% share of the
total stationary energy storage market by 2027;
-- Recent investments into stationary storage technologies,
including SoftBank's investment in a mechanical storage technology
company, and NEC's joint development agreement with a liquid metal
battery technology company, demonstrate the market need and
investment appetite for long duration stationary storage
technologies that do not use lithium-ion formulations;
-- In the long term, the recent DNV-GL Energy Transition Outlook
2019: Power Supply and Use noted that by 2050 installed energy
storage capacity will approach 30 terawatt hours. In comparison,
that amount is six times what will be deployed through pumped hydro
and more than twice the energy storage capacity provided to the
power system by electric vehicles.
Fortune Mojapelo, CEO of Bushveld Minerals Limited,
commented:
"The energy storage market presents a sizeable commercial
opportunity, potentially exceeding $660 billion by 2040 according
to Bloomberg, and significantly greater than the value of the
vanadium supply opportunity on its own. The VRFB Investment
Platform is an exciting new opportunity to directly access the
massive upside in energy storage and support select OEMs. In
addition, pursuing a wide array of partnerships with VRFB OEMs that
cover supply, deployment and investment gives Bushveld many more
options to unlock value through its integrated strategy. Bushveld
Energy will continue to pursue value accretive relationships with
VRFB companies along these three avenues, reinforcing our leading
position as a growing, low-cost, vertically integrated vanadium
company."
Inquiries: info@bushveldminerals.com
Bushveld Minerals +27 (0) 11 268 6555
Fortune Mojapelo, Chief Executive
Officer
Chika Edeh, Head of Investor
Relations
SP Angel Corporate Finance
LLP Nominated Adviser & Broker +44 (0) 20 3470 0470
Richard Morrison / Stephen
Wong
Abigail Wayne / Richard Parlons
Peel Hunt LLP Joint Broker +44 (0) 20 7418 8900
Ross Allister / James Bavister
BMO Capital Markets Limited Joint Broker +44 (0) 20 7236 1010
Jeffrey Couch / Tom Rider
Michael Rechsteiner / Neil
Elliot
Tavistock Financial PR +44 (0) 20 7920 3150
Charles Vivian / Gareth Tredway
Brunswick Financial PR (South Africa) +27 (0) 11 502 7300
Miyelani Shikwambana
ABOUT BUSHVELD MINERALS LIMITED
Bushveld Minerals is a low-cost, integrated, primary vanadium
producer, with ownership of high-grade vanadium assets.
The Company's flagship vanadium platform includes a 74 per cent
controlling interest in Bushveld Vametco Alloys (Pty) Ltd, a
primary vanadium mining and processing company; the Mokopane
Vanadium Project and the Brits Vanadium Project.
Bushveld's vision is to become a significant, low-cost,
integrated primary vanadium producer through owning high-grade
assets. This incorporates development and promotion of the role of
vanadium in the growing global energy storage market through
Bushveld Energy, the Company's energy storage project developer and
component manufacturer. Whilst the demand for vanadium remains
largely anchored in the steel industry, Bushveld Minerals believes
there is strong potential for an imminent and significant global
vanadium demand surge from the fast-growing energy storage market,
particularly through the use and adoption of Vanadium Redox Flow
Batteries.
While the Company's focus is on vanadium operations and the
development and promotion of VRFBs, it has additional investments
in coal, power and tin.
The Company's approach to project development recognises that,
whilst attractive project economics are imperative, they may be
insufficient to secure capital to bring them to account. A clear
path to production within a visible timeframe, low capital
expenditure requirements and scalability are important factors in
ensuring a positive return on investment. This philosophy is core
to the Company's strategy in developing projects.
Detailed information on the Company and progress to date can be
accessed on the website www.bushveldminerals.com.
About Bushveld Energy Limited
Bushveld Energy is a leading energy storage solutions provider,
focusing on the African market. Bushveld Energy recognises that
electricity in Africa intersects paramount potential for social
transformation with an immense commercial opportunity.
Launched in 2016, Bushveld Energy is focused on developing and
promoting the role of vanadium in the growing global energy storage
market through application in vanadium redox flow batteries. Its
near term strategy is to deploy several VRFB systems as part of its
longer term vision to become a significant electricity storage
provider in Africa by 2020, meeting the demand for utility scale
energy storage in Africa by leveraging South Africa-mined and
beneficiated vanadium.
Detailed information on the Company and progress to date can be
accessed on the website www.bushveldenergy.com.
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END
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