Aim-listed Bushveld Minerals on Wednesday reported its first consolidated net profit and net free cash flow for the group for the six-month period ended June 30.
Commenting on the results, CEO Fortune Mojapelo said the unaudited financial results for the first half of the financial year reflected the full consolidation of Vametco’s accounts since Bushveld Minerals acquired a majority controlling interest in December 2017.
Bushveld Minerals recently increased its interest in Vametco to 75% in order to gain maximum exposure to the business the company operates.
Despite Vametco already being a low-cost producer of vanadium, the company noted that potential exists to further improve its cost position by further improving its productivity.
To this end, Bushveld will be implementing several productivity initiatives, in addition to the expansion plans, to enhance Vametco’s performance across the production process.
Positive effects from these initiatives are expected to emerge in the coming year.
Meanwhile, the company’s efforts in building a leading energy storage company through Bushveld Energy are progressing well on all fronts.
These efforts comprise the construction of the electrolyte manufacturing plant in South Africa, the deployment of a vanadium redox flow battery (VRFB) at State-owned Eskom, securing mandates for large-scale VRFB deployments, as well as the development of vanadium electrolyte leasing products to promote the adoption of VRFBs in the global energy storage industry.
A $500 000 grant received from the US government, will go a long way in funding the implementation and enhancement of the Eskom VRFB project, the company added.
The new battery is now expected to be commissioned during the fourth quarter of this year.
In terms of financials, Bushveld posted a consolidated first half revenue of £62.1-million and earnings before interest, taxes, depreciation and amortisation (Ebitda) of £31.7-million.
Profit after tax was £21.1-million, and consolidated free cash flow was £10.2-million.
Operational highlights included nitrovan sales of 1 403 t, and nitrovan production of 1 360 t.
The company further stated that Bushveld remains one of the lowest cost vanadium producers in the world, with the operating costs in the first half being R284.4/kg.
Phase 2 of the Vametco expansion project was completed on time and within budget to raise nameplate capacity to 3 750 t/y.
The exploration programme at the Brits vanadium project has, meanwhile, shown vanadium grades in magnetite of between 1.54% and 2.09% vanadium pentoxide. This is similar to grades mined at Vametco.
Vametco’s revenue in the first half of the year increased by 139.2% to just over R1-billion, with Ebitda increasing by 429.6% to R521-million.
Bushveld Energy, meanwhile, has engaged an international chemicals company that has already designed and built a vanadium electrolyte production plant with multiple megalitre yearly capacity.
Bushveld Energy further initiated the environmental-impact assessment (EIA) process for the electrolyte production plant, including the appointment of the local EIA consultants.
Lemur Holdings, a subsidiary of Bushveld Minerals, and the Madagascar government, meanwhile, concluded a 30-year project concession agreement during the six-month period, which gives Lemur the right to build, own, operate and supply an initial 60 MW.
In addition, the concession gives Lemur the right to build an evacuation line of up to 138 kV for transport of the electricity to the connection points.