TIDMBMN
RNS Number : 9285P
Bushveld Minerals Limited
23 June 2022
Market Abuse Regulation ("MAR") Disclosure
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
23 June 2022
Bushveld Minerals Limited
("Bushveld Minerals" "Bushveld" or the "Company")
Bushveld Energy secures funding for Vametco hybrid mini-grid
Bushveld Minerals Limited (AIM: BMN), the AIM-quoted, integrated
primary vanadium producer and energy storage solutions provider
with ownership of high-grade assets in South Africa, is pleased to
announce that it has secured funding for the engineering,
procurement and construction ("EPC") of the Vametco hybrid
mini-grid, which is owned by its 84%-owned energy subsidiary,
Bushveld Energy Limited ("Bushveld Energy").
-- Bushveld Energy has completed the development and achieved
financial closing for a 3.5 MW solar PV plus a 1 MW / 4 MWh
Vanadium Redox Flow Battery ("VRFB") hybrid mini-grid project for
Vametco, which will operate as a funded independent power producer
("IPP").
-- Bushveld Energy and NESA Investment Holdings, a South African
investment firm, have signed a shareholders agreement as strategic
equity partners in the project's development and financing, with
the project being housed in a separate special purpose vehicle
("SPV").
o NESA has provided 60% of the equity, while Bushveld Energy has
provided 40%. Bushveld Energy will recognise a development fee of
ZAR5.6 million as revenue from the project upon financial
close.
-- ABSA Relationship Banking has approved a ZAR64 million
(approximately US$4.1 million) loan to part fund the construction
of the mini-grid project.
-- The project's total cost is estimated to be ZAR113 million
(approximately US$7.1 million).
o It will be built on a turnkey basis by NESA Power, who have
already executed an Engineering, Procurement and Supply (EPC)
Agreement alongside the SPV.
o As previously announced, the project's 1 MW/4 MWh VRFB will be
supplied by CellCube, a VRFB original equipment manufacturer in
which Bushveld owns an indirect 25.25% interest.
-- The Board of the SPV will consist of 5 directors, 3 from NESA
and 2 from Bushveld Energy, in proportion to the shareholding.
-- Vametco has sold 26 mtV for the production of electrolyte,
required for the VRFB which is currently being converted into
electrolyte overseas.
-- Site preparation for construction began in Q1 2022. The
project is now fully funded and is expected to be completed in H1
2023.
Fortune Mojapelo, CEO of Bushveld Minerals, commented :
"We are delighted to have secured the necessary funding for the
EPC of the hybrid mini-grid at Vametco. This project is the first
of its kind in South Africa, and will serve as a VRFB reference
site in South Africa for the mining industry, utilities and other
users. This VRFB mini-grid project is a useful proof-of-concept of
the greater technological qualities of long-duration VRFB systems
when used in conjunction with renewable energy. At a fundamental
level the project also perfectly demonstrates the sustainable uses
for vanadium and positions it as a key metal in the green energy
transition.
"It is also very encouraging to note that the majority of the
capital invested in the mini-grid project has come from sources
outside of Bushveld Minerals. This not only proves the
attractiveness of the business case for long-duration energy
storage using vanadium, but also demonstrates investor interest in
the market in the roll-out of VRFB technology.
"In the future we expect to see increased demand for projects
combining solar PV and VRFB technology, especially in regions with
similar challenges to South Africa."
Percy Ying, Director of NESA Investment Holdings, commented:
"NESA Investment Holdings and the NESA Power Group are proud to
partner with Bushveld Energy to develop its flagship renewable
energy project for Bushveld Minerals' Vametco mine. In addition to
generating long term positive benefits for the mine, the project
will also be one of the first renewable energy projects in South
Africa to employ vanadium battery storage technology and
demonstrate its commercial viability on a large scale.
Understanding the value proposition Vanadium Redox Flow Batteries
have for South Africa, we are confident that the project, once
completed, will catalyse further deployment of large-scale vanadium
battery energy storage systems in South Africa and contribute to
securing the country's energy future."
Justin Schmidt, Head of Renewable Energy at ABSA Relationship
Banking commented :
"We are excited to be part of this project and relationship. The
project is another proof point that the ever-evolving market for
solar is growing. In addition, it also highlights the important
role regulatory reform is playing to enable energy availability for
business."
The project is part of Bushveld's strategy to demonstrate the
greater technological qualities of long-duration VRFB systems when
used in conjunction with renewable energy.
The hybrid mini-grid project will provide roughly 10.7% of
Vametco's electrical energy while also demonstrating the technical
and commercial viability of hybrid mini-grids employing solar PV
and VRFB technology at grid parity. Vametco has signed a 25-year
power purchasing agreement for the electricity. In addition,
Vametco has sold the vanadium for the battery at prevailing market
rates.
The project will help Bushveld's mining and processing
activities reduce their carbon footprint. CO(2) emissions will be
reduced by more than 8,000 metric tonnes per year and over 200,000
tonnes of CO(2) during the life of the project. This will help
Bushveld Minerals meet its environmental, social, and governance
(ESG) goals and contribute to South Africa's national Climate
Goals.
Bushveld Energy has started the development of captive options
with up to 120 MW of PV and 180 MWh of storage within the Bushveld
Minerals Group. NESA and Bushveld Energy expect to collaborate on
future projects and NESA has been granted a Right of First Refusal
to fund any equity in the captive options that is not taken up by
Bushveld Energy or its affiliates. As part of a broader, long-term
ESG strategy, these initiatives will also reduce the Group's
reliance on the Eskom grid, help limit energy cost rises, and lower
the carbon footprint of its vanadium production.
The mini-grid will also use locally mined and beneficiated
vanadium, demonstrating how VRFB energy solutions can provide more
local value for South Africa than any other storage technology and
thus ensure a Just Energy Transition in South Africa.
The Vametco project will be one of Africa's first solar
mini-grid projects with long-duration storage to be financed as an
off-balance sheet independent power producer and deploy one of the
largest flow batteries on the continent.
S
Enquiries: info@bushveldminerals.com
+27 (0) 11 268
Bushveld Minerals Limited 6555
Fortune Mojapelo, Chief Executive
Officer
Chika Edeh, Investor Relations
Nominated Adviser +44 (0) 20 3470
SP Angel Corporate Finance LLP & Broker 0470
Richard Morrison / Charlie Bouverat
Grant Baker / Richard Parlons
+44 (0) 20 7653
RBC Capital Markets Joint Broker 4000
Jonathan Hardy / Caitlin Leopold
Tavistock Financial PR
Gareth Tredway / Tara Vivian-Neal +44 (0) 207 920
/ Adam Baynes 3150
ABOUT BUSHVELD MINERALS LIMITED
Bushveld Minerals is a low-cost, vertically integrated primary
vanadium producer. It is one of only three operating primary
vanadium producers, owning 2 of the world's 4 operating primary
vanadium processing facilities. In 2020, the Company produced more
than 3,600 mtV, representing approximately three per cent of the
global vanadium market. With a diversified vanadium product
portfolio serving the needs of the steel, energy and chemical
sectors, the Company participates in the entire vanadium value
chain through its two main pillars: Bushveld Vanadium, which mines
and processes vanadium ore; and Bushveld Energy, an energy storage
solutions provider.
Bushveld Vanadium is targeting to materially grow its vanadium
production and achieve an annualised steady state production run
rate of between 5,000 mtVp.a. and 5,400 mtVp.a by the end of 2022.
Growth plans to 8,000 mtVp.a. will be pursued, subject to funding
and market conditions.
Bushveld Energy is focused on developing and promoting the role
of vanadium in the growing global energy storage market through the
advancement of vanadium-based energy storage systems, specifically
Vanadium Redox Flow Batteries ("VRFBs").
Detailed information on the Company and progress to date can be
accessed on the website - www.bushveldminerals.com
ABOUT BUSHVELD ENERGY LIMITED
Bushveld Energy Limited is an energy storage investor, project
developer and component manufacturer , with registered offices in
Mauritius and a wholly owned subsidiary in South Africa. 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 energy storage market
through the application of VRFBs. Bushveld Energy is building an
energy storage supply chain in South Africa by leveraging the
Company's South African-mined and beneficiated vanadium.
http://www.bushveldenergy.com
ABOUT NESA POWER
Nesa Power (Pty) Ltd ("Nesa") is a South African based
commercial, industrial and mining ("C&I") focused independent
power producer. Nesa provides turnkey renewable energy solutions
and services including project design, procurement, financing,
operating and monitoring services to the C&I sector with an
experienced management team and proven track record that includes
the development and management of over 16MW of C&I solar PV
projects since 2017.
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