REG - Bushveld Minerals Ld - Funding secured for Vametco hybrid mini-grid

Bushveld MineralsAnnouncement

23/06/2022 07:00

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RNS Number : 9285P  Bushveld Minerals Limited  23 June 2022

Market Abuse Regulation ("MAR") Disclosure

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

 

 

23 June 2022

 

Bushveld Minerals Limited

("Bushveld Minerals" "Bushveld" or the "Company")

Bushveld Energy secures funding for Vametco hybrid mini-grid

Bushveld Minerals Limited (AIM: BMN), the AIM-quoted, integrated primary
vanadium producer and energy storage solutions provider with ownership of
high-grade assets in South Africa, is pleased to announce that it has secured
funding for the engineering, procurement and construction ("EPC") of the
Vametco hybrid mini-grid, which is owned by its 84%-owned energy subsidiary,
Bushveld Energy Limited ("Bushveld Energy").

§ Bushveld Energy has completed the development and achieved financial
closing for a 3.5 MW solar PV plus a 1 MW / 4 MWh Vanadium Redox Flow Battery
("VRFB") hybrid mini-grid project for Vametco, which will operate as a funded
independent power producer ("IPP").

§ Bushveld Energy and NESA Investment Holdings, a South African investment
firm, have signed a shareholders agreement as strategic equity partners in the
project's development and financing, with the project being housed in a
separate special purpose vehicle ("SPV").

o  NESA has provided 60% of the equity, while Bushveld Energy has provided
40%. Bushveld Energy will recognise a development fee of ZAR5.6 million as
revenue from the project upon financial close.

§ ABSA Relationship Banking has approved a ZAR64 million (approximately
US$4.1 million) loan to part fund the construction of the mini-grid project.

§ The project's total cost is estimated to be ZAR113 million (approximately
US$7.1 million).

o  It will be built on a turnkey basis by NESA Power, who have already
executed an Engineering, Procurement and Supply (EPC) Agreement alongside the
SPV.

o  As previously announced, the project's 1 MW/4 MWh VRFB will be supplied by
CellCube, a VRFB original equipment manufacturer in which Bushveld owns an
indirect 25.25% interest.

§ The Board of the SPV will consist of 5 directors, 3 from NESA and 2 from
Bushveld Energy, in proportion to the shareholding.

§ Vametco has sold 26 mtV for the production of electrolyte, required for the
VRFB which is currently being converted into electrolyte overseas.

§ Site preparation for construction began in Q1 2022. The project is now
fully funded and is expected to be completed in H1 2023.

 

Fortune Mojapelo, CEO of Bushveld Minerals, commented:

"We are delighted to have secured the necessary funding for the EPC of the
hybrid mini-grid at Vametco. This project is the first of its kind in South
Africa, and will serve as a VRFB reference site in South Africa for the mining
industry, utilities and other users. This VRFB mini-grid project is a useful
proof-of-concept of the greater technological qualities of long-duration VRFB
systems when used in conjunction with renewable energy. At a fundamental level
the project also perfectly demonstrates the sustainable uses for vanadium and
positions it as a key metal in the green energy transition.

 

"It is also very encouraging to note that the majority of the capital invested
in the mini-grid project has come from sources outside of Bushveld Minerals.
This not only proves the attractiveness of the business case for long-duration
energy storage using vanadium, but also demonstrates investor interest in the
market in the roll-out of VRFB technology.

 

"In the future we expect to see increased demand for projects combining solar
PV and VRFB technology, especially in regions with similar challenges to South
Africa."

 

Percy Ying, Director of NESA Investment Holdings, commented:

"NESA Investment Holdings and the NESA Power Group are proud to partner with
Bushveld Energy to develop its flagship renewable energy project for Bushveld
Minerals' Vametco mine. In addition to generating long term positive benefits
for the mine, the project will also be one of the first renewable energy
projects in South Africa to employ vanadium battery storage technology and
demonstrate its commercial viability on a large scale. Understanding the value
proposition Vanadium Redox Flow Batteries have for South Africa, we are
confident that the project, once completed, will catalyse further deployment
of large-scale vanadium battery energy storage systems in South Africa and
contribute to securing the country's energy future."

 

Justin Schmidt, Head of Renewable Energy at ABSA Relationship Banking
commented:

"We are excited to be part of this project and relationship. The project is
another proof point that the ever-evolving market for solar is growing. In
addition, it also highlights the important role regulatory reform is playing
to enable energy availability for business."

 

The project is part of Bushveld's strategy to demonstrate the greater
technological qualities of long-duration VRFB systems when used in conjunction
with renewable energy.

 

The hybrid mini-grid project will provide roughly 10.7% of Vametco's
electrical energy while also demonstrating the technical and commercial
viability of hybrid mini-grids employing solar PV and VRFB technology at grid
parity. Vametco has signed a 25-year power purchasing agreement for the
electricity. In addition, Vametco has sold the vanadium for the battery at
prevailing market rates.

 

The project will help Bushveld's mining and processing activities reduce their
carbon footprint. CO(2) emissions will be reduced by more than 8,000 metric
tonnes per year and over 200,000 tonnes of CO(2) during the life of the
project. This will help Bushveld Minerals meet its environmental, social, and
governance (ESG) goals and contribute to South Africa's national Climate
Goals.

 

Bushveld Energy has started the development of captive options with up to 120
MW of PV and 180 MWh of storage within the Bushveld Minerals Group. NESA and
Bushveld Energy expect to collaborate on future projects and NESA has been
granted a Right of First Refusal to fund any equity in the captive options
that is not taken up by Bushveld Energy or its affiliates. As part of a
broader, long-term ESG strategy, these initiatives will also reduce the
Group's reliance on the Eskom grid, help limit energy cost rises, and lower
the carbon footprint of its vanadium production.

 

The mini-grid will also use locally mined and beneficiated vanadium,
demonstrating how VRFB energy solutions can provide more local value for South
Africa than any other storage technology and thus ensure a Just Energy
Transition in South Africa.

 

The Vametco project will be one of Africa's first solar mini-grid projects
with long-duration storage to be financed as an off-balance sheet independent
power producer and deploy one of the largest flow batteries on the continent.

 

ENDS

 

Enquiries: info@bushveldminerals.com

 Bushveld Minerals Limited                                                        +27 (0) 11 268 6555
 Fortune Mojapelo, Chief Executive Officer
 Chika Edeh, Investor Relations

 SP Angel Corporate Finance LLP                   Nominated Adviser & Broker      +44 (0) 20 3470 0470
 Richard Morrison / Charlie Bouverat
 Grant Baker / Richard Parlons

 RBC Capital Markets                              Joint Broker                    +44 (0) 20 7653 4000
 Jonathan Hardy / Caitlin Leopold

 Tavistock                                        Financial PR
 Gareth Tredway / Tara Vivian-Neal / Adam Baynes                                  +44 (0) 207 920 3150

 

 

ABOUT BUSHVELD MINERALS LIMITED

Bushveld Minerals is a low-cost, vertically integrated primary vanadium
producer. It is one of only three operating primary vanadium producers, owning
2 of the world's 4 operating primary vanadium processing facilities. In 2020,
the Company produced more than 3,600 mtV, representing approximately three per
cent of the global vanadium market. With a diversified vanadium product
portfolio serving the needs of the steel, energy and chemical sectors, the
Company participates in the entire vanadium value chain through its two main
pillars: Bushveld Vanadium, which mines and processes vanadium ore; and
Bushveld Energy, an energy storage solutions provider.

Bushveld Vanadium is targeting to materially grow its vanadium production and
achieve an annualised steady state production run rate of between 5,000
mtVp.a. and 5,400 mtVp.a by the end of 2022. Growth plans to 8,000 mtVp.a.
will be pursued, subject to funding and market conditions.

Bushveld Energy is focused on developing and promoting the role of vanadium in
the growing global energy storage market through the advancement of
vanadium-based energy storage systems, specifically Vanadium Redox Flow
Batteries ("VRFBs").

Detailed information on the Company and progress to date can be accessed on
the website - www.bushveldminerals.com (http://www.bushveldminerals.com)

 

ABOUT BUSHVELD ENERGY LIMITED

Bushveld Energy Limited is an energy storage investor, project developer and
component manufacturer, with registered offices in Mauritius and a wholly
owned subsidiary in South Africa. Bushveld Energy recognises that electricity
in Africa intersects paramount potential for social transformation with an
immense commercial opportunity.

Launched in 2016, Bushveld Energy is focused on developing and promoting the
role of vanadium in the growing energy storage market through the application
of VRFBs. Bushveld Energy is building an energy storage supply chain in South
Africa by leveraging the Company's South African-mined and beneficiated
vanadium.

http://www.bushveldenergy.com (http://www.bushveldenergy.com)

 

ABOUT NESA POWER

Nesa Power (Pty) Ltd ("Nesa") is a South African based commercial, industrial
and mining ("C&I") focused independent power producer. Nesa provides
turnkey renewable energy solutions and services including project design,
procurement, financing, operating and monitoring services to the C&I
sector with an experienced management team and proven track record that
includes the development and management of over 16MW of C&I solar PV
projects since 2017.

 

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