Aim-listed integrated primary vanadium producer and energy storage solutions provider Bushveld Minerals increased its group vanadium production by 4% year-on-year in the first half of this year to 1 641 t.

During the period, Bushveld’s average production cost averaged 6% higher year-on-year at $28.32/kg, while first-half sales remained marginally the same as those achieved in 2021 at 1 644 t.

In the second quarter of the year, Bushveld’s group production grew by 25% year-on-year at 668 t.

Owing to continued operational performance and stability, the Vametco mine and plant achieved 24% higher production year-on-year at 1 226 t, while second quarter production was 20% lower year-on-year at 477 t as a result of a 26-day planned maintenance shutdown during the quarter.

Vametco’s first half production cash cost of $23.50/kg was 9% lower year-on-year, as a result of increased production volumes, while second-quarter production cash costs of $24.40/kg were 5% lower year-on-year – both as a result of a weaker rand/dollar exchange rate.

Going forward, Bushveld expects Vametco to meet the upper end of production guidance of between 2 450 t and 2 550 t for the full-year, while the operation is also on track to meet its production cash cost guidance of between $22.70/kg and $23.50/kg.

Vametco is also on target to meet a steady-state production run rate of 2 800 t/y by the end of the year.

CEO Fortune Mojapelo says the focus on operational stability at Vametco is “pleasingly bearing fruit” in the form of reliable production levels supportive of Vametco meeting the upper end of production guidance for the full-year.

VANCHEM

Bushveld’s primary vanadium-processing facility and beneficiation plant, Vanchem, experienced 29% lower production at 415 t in the first half, as a result of lower production volumes in the first quarter, which were impacted by lower recoveries as a result of Kiln 1’s refractory reaching the end of useful life.

Second-quarter production was 35% lower, at 191 t, as production was impacted by load-shedding, a slower-than-planned commissioning of Kiln 3 and a slower-than-anticipated ramp up post commissioning.

“At Vanchem, the combination of low recoveries . . . and extensive load-shedding has had an unfavourable impact. This has resulted in lost production and necessitated placing Vanchem’s guidance under review,” Mojapelo says.

“While both Vametco and Vanchem are adversely impacted by load-shedding, for Vametco this means curtailment of power use but it does not affect Vametco’s production, while for Vanchem – which is on the municipal power grid – this means a complete loss of power and reliance on standby diesel generators,” he adds.

“Although it was encouraging to see the South African government send a strong message [this week] on how it plans to overcome the country’s energy crisis, it is unfortunate that in the short term, Vanchem’s ability to operate smoothly is being affected by the ongoing load-shedding,” he says.

Vanchem’s first half production cash cost of $43.20/kg was 46% higher year-on-year, while the second quarter production cash cost of $48.50/kg was 73% higher year-on-year, owing to lower production volumes and higher costs related to the commissioning of Kiln 3.

Bushveld expects costs to normalise during the second half, supported by higher production volumes.

Going forward, Bushveld reports that Vanchem’s production and cost guidance is under review owing to lower production volumes in the first quarter. Bushveld previously posted production guidance of between 1 750 t and 1 850 t, and production cash cost guidance of between $27.70/kg and $28.40/kg.

“At Vanchem, the combination of low recoveries . . . and extensive load-shedding has had an unfavourable impact. This has resulted in lost production and necessitated placing Vanchem’s guidance under review,” he says.

However, despite the slower-than-expected ramp-up of Kiln 3, Vanchem remains on track to achieve its steady-state production run rate of 2 600 t/y by the end of the year, assuming forecasted production volumes at Vanchem reach 222 t by December.

Meanwhile, Bushveld reports that, while logistics delays within South Africa have largely been resolved, international logistics channels remain susceptible to shipping availability constraints.

“As a group, we remain confident in our ability to achieve a production run rate of 5 000 t/y to 5 400 t/y, by the end of this financial year,” says Mojapelo.