Vanadium batteries continue to support the world’s adoption of a circular economy by providing a sustainable, safe and low-cost energy option with a lifecycle of more than 20 years.
Over its lifespan, vanadium redox flow battery (VRFB) technology offers the lowest cost per kilowatt-hour stored, says integrated vanadium producer Bushveld Minerals CEO Fortune Mojapelo, who adds that the vanadium chemistry of the battery is also fully reusable and recyclable at the end of project life.
South Africa, which holds the largest and highest-grade primary resources of vanadium globally, leading to growth in demand in the energy sector, could benefit from the exploitation of these resources, he notes.
However, in order for Bushveld to gain a foothold in this new demand sector, and to help ensure the technology is recognised as a viable energy storage option, the producer had to participate directly in the downstream value chain.
“This presents a unique opportunity for South Africa to not only mine vanadium but to also beneficiate vanadium and develop the local value chain, which will ensure the value addition benefits local businesses and communities,” Mojapelo comments in reference to Bushveld’s strategy to mobilise capital to scale up growth and manufacturing capacity of VRFB manufacturers, and its investments into VRFB manufacturer Enerox.
He explains that Bushveld “recognised early on that vanadium had unique properties that would allow it to benefit from an energy storage market that is predicted to show major growth as the world transitions to renewables and also seeks to make existing power grids more efficient”.
Bushveld last month invested a further $7.5-million in Enerox as part of a larger $30-million commitment by Enerox investors to scale up its production capacity.
Enerox will expand its manufacturing and sales capacity to 30 MW by next year, Bushveld reported in April, noting that there is potential for future expansions of at least 150 MW by 2025.
Aim-listed Bushveld’s subsidiary, Bushveld Energy, has an indirect 25.25% interest in Enerox through VRFB Holdings, which owns a 50% interest in Enerox Holdings.
The follow-on investment in Enerox is in line with Bushveld’s strategy to mobilise capital to scale up growth and manufacturing capacity of VRFB manufacturers, as illustrated by the previous and ongoing success of Invinity.
In addition to a healthy return from Bushveld’s $5-million investment, the success of the investment in Invinity is evidenced by its Aim listing, with a healthy $200-million market capitalisation and a well-funded programme to scale up its production capacity to support a solid pipeline of announced VRFB projects.
Bushveld is funding its follow-up investment in Enerox by the partial sell down of its stake in Invinity, for which it received $8.8-million. Bushveld Energy now has a holding of less than 3% in Invinity.
To this end, Bushveld previously cited intentions to seek a listing on the JSE, though the Covid-19 pandemic delayed plans and saw the producer redirect much of its focus to dealing with the impacts of the pandemic, such as prioritising the safety of employees, while focusing on operations.
During this time, Bushveld secured $65-million in finance from Orion Mine Finance to ensure Bushveld’s growth strategy remained “robust and on schedule”.
Mojapelo, however, indicates that Bushveld will readdress some of its strategic options – such as a JSE listing – “soon”, despite the pandemic still being present worldwide.
In terms of investment appetite from South Africa’s financial institutions, he comments that Bushveld “made fair progress” when it headed down the listing path, with a number of institutions having expressed “plenty of interest”.
“In fact, since that time and post a tough year for the world in general, I would say Bushveld has emerged as an even more attractive investor proposition, given the funding deal with Orion late last year that funds our growth strategy, and the acceleration of the energy transition agenda underway globally which will benefit VRFBs,” he elaborates, noting that Bushveld has continued to engage with South African investors and that the interest in the company is still “very robust”.
INDUSTRY DEVELOPMENT
Bushveld has, over the past few years, formulated an innovative funding model for VRFBs that capitalise on the fact that vanadium in batteries does not degrade and is, therefore, reusable post the life of the battery.
“In a nutshell, this allows the vanadium to be rented into the battery, rather than sold, providing a major reduction in upfront costs,” Mojapelo points out.
Bushveld has also developed an electrolyte production facility in South Africa in partnership with the Industrial Development Corporation, which Mojapelo says “could place the country right at the centre of the energy transition happening globally by being a leading supplier of the key ingredient for these batteries”.
The producer also continues to support and collaborate with global VRFBs manufacturers as per its VRFB original-equipment manufacturers partnership strategy, where Bushveld is credited with conceiving the idea for the merger between Avalon and redT energy, which resulted in the creation of Invinity, now a $200-million market cap vanadium storage provider, listed in London.
Additionally, Bushveld has also built its own mini-grid at the North West-based Vametco mine, which allows the producer to gain external funding for a commercial solar and VRFB facility in South Africa.
With all that in mind, the recent investment in Enerox, further helps develop the VRFB sector, ensuring capacity can increase in line with growth in demand and ensure competitiveness with other technologies out there, Mojapelo states, adding that by beneficiating Bushveld’s product in South Africa all the way to battery-grade material, “Bushveld’s downstream energy storage proposition aligns with the government’s stated goals of downstream mineral beneficiation and adopting stationary energy storage”.
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