Aim-listed Bushveld Minerals has increased its indirect beneficial interest in Vametco Alloys to 75%, from 59.1%, through the acquisition of Sojitz Noble Alloys’ 21.22% interest in Vametco’s intermediate holding company Strategic Minerals Corporation (SMC), for $20-million.
Following completion of the transaction, Bushveld will, through wholly owned Bushveld Vametco Limited, own 100% of SMC and, therefore, have an indirect beneficial interest of 75% in Vametco.
The acquisition is further aligned with Bushveld’s plans in the global energy storage space in that it provides capacity for potential electrolyte manufacturing.
The acquisition is a significant achievement, says Bushveld CEO Fortune Mojapelo, who elaborated that the achievement fulfills the company’s undertaking to simplify its corporate structure in order to increase exposure to the underlying cash flows at Vametco.
Vametco’s strong cash generation capabilities, he says, are demonstrated by the revenue and earnings before interest, taxes, depreciation and amortisation generated in the first half of this year, which amounted to just over R1-billion and R521-million, respectively.
“The transaction is in line with our priorities laid our earlier this year as part of the $22-million placing and sets the company in an advantageous position to deliver on its strategy to grow into a significant, low-cost vertically integrated vanadium platform,” Mojapelo points out.
Vanadium, Bushveld explains, is robust and is in growing demand from steel manufacturers, as well as in the energy storage sector.
There is also a significant structural supply deficit owing to concentrated and constrained primary production and limited new global vanadium production on the horizon.