Aim-listed Bushveld Minerals has advanced the acquisition of Austrian group Enerox by acquiring a further 65.1% of the investment vehicle’s share capital through Enerox Holdings Limited (EHL).
EHL is a newly incorporated investment vehicle formed by a consortium of investors, including Bushveld Energy Limited (BEL), which is an 84%-owned subsidiary of Bushveld Minerals.
The investment is in line with the company's strategy of establishing a vanadium redox flow batteries (VRFB) investment platform (VIP) to lead investments in VRFB original-equipment manufacturers (OEMs) with attractive upside potential.
The VIP is one of multiple avenues of partnering with OEMs.
Through the consortium, BEL and its initial investments will play a catalyst role and mobilise additional capital from third-party funders to establish an investment capital pool to support VRFB OEM growth, Bushveld Minerals said in an August 3 statement, noting that these partnerships support BEL's business model, which includes electrolyte manufacturing and rental, VRFB manufacturing and deployments.
Additionally, BEL intends to own a minority interest in EHL, in line with its strategy of holding minority positions in select VRFB OEMs and being a catalyst to mobilise third-party financing and assist the scale up VRFB OEMs.
Elaborating on the investment rationale, Bushveld noted that the Enerox VRFB product is “one of the most widely deployed over the past ten years, offering a unique value proposition in the industry”.
Enerox also has a global customer base with over 130 field installations over the past decade, across five continents, and the newly redesigned VRFB product is orientated around a modular and stackable 40 ft container base configuration which increases standardisation to reduce the costs of manufacturing, field installation and maintenance.
There is also an expected diversification of Bushveld's customer and revenue base with preferential vanadium supply rights into energy storage products to support Bushveld's mining, processing and chemicals activities.
Under a separate agreement proposed to be entered into between Bushveld and Enerox, it is intended that Bushveld will be awarded a right of first refusal to supply vanadium products to Enerox on the same material terms as any other supplier.
This would provide a future hedge to Bushveld's position against volatility in the vanadium price once the VRFB market has developed.
Bushveld Minerals CEO Fortune Mojapelo confirmed that the closing of this transaction is in line with the company’s stated strategy to “play a catalytic role in mobilising financing to scale up VRFB manufacturing capacity”.
“Despite the global challenges caused by the Covid-19 pandemic, the emerging push to combine efforts to stimulate the global economy and an accelerated energy transition to clean energy has made the timing of this investment ideal,” he said.