Bushveld Minerals raises risk of undershooting vanadium production target for 2021

Fortune Mojapelo, CEO, Bushveld Minerals

BUSHVELD Minerals said there was a risk of lower than guided vanadium production in its 2021 financial year following a combination of industrial action and a 35-day maintenance programme at its Vametco facilities in the North West province in the first quarter.

The company had previously guided to vanadium production of between 4,100 tons and 4,350 tons this year. It said today production would come in at the low end of the guidance, but added that “… risks to this guidance exist as a consequence of Vametco’s challenges in achieving consistent plant performance”.

Its Vanchem facility, situated in Mpumalanga province, had performed well. It had gradually ramped up production since Bushveld Minerals bought the asset in 2019.

“We recognise that Vametco has underperformed at times and work such as the 35-day maintenance shutdown is expected to improve on the reliability and performance issues experienced in the past,” said Fortune Mojapelo, CEO of Bushveld Minerals.

Sales in the first quarter totalled 788 tons compared to 1,080 tons in the first quarter of the previous financial year, but higher than production of 688 tons (Q1 2020: 880 tons).  Mojapelo said that the recent performance at Vametco had shown improved stability of operation.

The production problems are untimely for Bushveld given the improvement in the vanadium market, as the company forecast would occur. The first quarter ferrovanadium price averaged $30,90 per kilogram compared to $26,50/kg a year ago. The current spot price for ferrovanadium is about $32/kg, it estimated.

“The vanadium price has continued to rise following a strong start to the year with increased demand in Europe and US on the back of a post-Covid period of growth,” said Mojapelo. “As the world continues to open up, we have confidence in the demand side of the vanadium market,” he said.