IT’S been an important year for Bushveld Minerals, the UK-listed company which recently spun off an investment in South African and Namibian tin into AfriTin, also listed in London.
Shares in Bushveld have increased from 1.57pence per share a year ago to 8.55p/share today – its highest level in more than three years, and values the company at £70m. In South African terms, that’s a valuation of R1.3bn which would make it worth more than Wescoal Holdings or Coal of Africa (renamed MC Mining).
According to Anthony Viljoen, a shareholder in Bushveld Minerals and CEO of AfriTin, the magic number is $100m since at that market capitalisation, it’s possible to attract more institutional support. Currently, about 80% of the share is held in retail hands. There is some institutional support – such as Barclays Wealth and Investment Management (UK) which owns about 4% as of August 31 – but there’s not enough of the larger institutions, said Viljoen. “We have a lot of retail shareholders so the share is volatile,” he said.
Still, the share is on the up and up.
Right now, Bushveld Minerals is benefiting from its exposure to vanadium prices which it earned through the $11m acquisition of Bushveld Vametco, a transaction completed at the end of last year. Located in the Bushveld Complex, Vametco is slap bang in the world’s largest high grade primary vanadium resources. Given the concentration of ownership in primary vanadium production – most of it is produced from slag – that gives Vametco an important competitive advantage.
“The mine currently produces about 3,000 tonnes per year of vanadium, but we are expanding it to 5,000 tonnes annually which is about 5% of world supply,” said Viljoen referring to phase three expansion plans expected to be completed in the next two to three years. There are two major forces expected to encourage production increases.
One is long-term, an opportunity to supply vanadium to new technology called redox flows batteries (VRFB) which are forecast to comprise 20% of vanadium consumption by about 2030. The second factor is shorter term; now, in fact. That’s a review in China of the tensile strength of rebar, which is a steel product used in construction – the outcome of which is that steel must be two times stronger.
Given the paucity of vanadium supply, the fact that vanadium is what helps give steel is strength, and the blue sky of VRFBs, the vanadium leg of the Bushveld business is looking well positioned. “The Vanadium price up 150% since brought Vametco in,” said Viljoen. “It is making us a lot of cash,” he added, but wouldn’t disclose numbers, as yet.
