Vanadium producer Bushveld Minerals’ new CEO Craig Coltman, who took up the position on July 1, acknowledges that the company faces challenges, but says he also sees many positive signs and opportunities to get the most out of Bushveld’s most import asset – its people – and to achieve full potential at its operations.

“Getting maximum value out of Vametco and Vanchem is my number one priority,” he states in an August 2 operational market update. 

He says he will focus on the fundamentals of the business by ensuring stability at Vametco and achieving a turnaround at Vanchem.

Coltman will review the group’s capital allocation strategy and prioritise projects that provide higher financial benefits with manageable risk.   

The company reports that production for the first half of this year had increased to 1 784 t of vanadium, compared with the 1 641 t produced in the first half of 2022. Output, however, fell short of the company’s expectations.

Production at Vametco decreased to 1 167 t for the six months ended June 30, compared with the 1 226 t produced in the first half of 2022.

Bushveld points out that about 200 t of output was lost in the second quarter as a result of a five-day unplanned maintenance programme of the sulphate recovery plant (SRP) and unexpected high rainfall levels; the impact of barren dam level constraints on the plant; and an unplanned seven-day maintenance programme at the dust collectors, as well as power instability owing to a transformer failure.

Production at Vanchem for the six months increased to 617 t, from 415 t in the prior comparable period; however, output was “materially lower” than what Bushveld had anticipated owing to unplanned plant breakdowns and unscheduled power disruptions.

“Vanchem has struggled during the first half of 2023. Although volumes are higher relative to last year, its production is significantly lower than what it should have been for the first half of this year,” Coltman comments.

“With regard to guidance and, after careful review, we have come to the conclusion that, largely owing to challenges at Vametco associated with the levels of the barren dam and the SRP, as well as Vanchem’s weak first-half performance and delays in the use of the better-quality ore, the production outlook for this year needs to be revised," he adds.

The group’s production guidance for the full-year has been revised to between 3 700 t and 3 900 t of vanadium, compared with the previously guided 4 200 t to 4 500 t of vanadium. 

“We have initiated a turnaround project. I'm glad to report that a number of initiatives have already been implemented during the month of July.

“These [are aimed at] getting Vanchem into a sustainable, positive cash flow position in the short term and achieve sustainable production levels of about 180 t ar month within the next six months,” Coltman says.

The initiatives include changing the reagent mix from 100% sodium sulphate to a mix of sodium carbonate and sodium sulphate, which will reduce the silica build-up at the kiln and, hence, increase kiln availability. 

Busveld will also deploy a team from its Vametco operation to the Vanchem facility to improve knowledge sharing.

Lastly, shift managers are providing 24/7 supervision to ensure immediate decision-making. 

Since implementing these initiatives, Bushveld has seen Vanchem produce 158 t for the month of July

“In order for Vanchem to meet its revised guideline of 1 400 t/y to 1 500 t/y, average monthly production has to increase by at least 50%, relative to the average monthly production for the first half. This has already been achieved in July

“We have a reasonably high level of confidence of his performance continuing for the rest of the year and achieving the new revised group guidance,” Coltman says.

“While it’s still early days, there’s a number of items that have to be prioritised for the rest of the year.

“Bushveld is a company with potential, and I look forward to sharing the company's investment proposition from a new perspective,” he adds.

VAMETCO HYBRID MINI-GRID

The company points out that the Bushveld Vametco hybrid mini-grid project is making progress.

The 1 MW or 4 MWh vanadium redox flow battery system supplied by energy storage solutions provider CellCube has been filled with electrolyte and energised for the first time.

Currently, the construction of the 3.5 MW solar photovoltaic plant is in progress, and the entire project is expected to become fully operational in the fourth quarter of this year.

Upon completion, the plant will provide nearly 10% of Vametco's electricity requirements.

BELCO

Meanwhile, during the first half of this year, the construction and initial testing of Bushveld’s Belco electrolyte manufacturing plant in East London was completed. In the same period, the hot commissioning phase has also commenced.

The plant will continue the hot commissioning process during the second half of this year, with production to start once suitable off-takers for the product are secured.