Integrated primary vanadium producer Bushveld Minerals delivered record production of 2 833 t of vanadium, in the form of Nitrovan, in the year ended December 31.

Production was 11% higher than the 2 560 t of vanadium produced in 2018 and was in line with guidance of 2 800 t to 2 900 t of vanadium.

The company, which concluded the buyout of Vanchem in November, is looking forward to further growth.

"The acquisition of Vanchem was transformational as it gives us the diversification and operational base to achieve our near- and medium-term growth plans. I am delighted that Bushveld is in the strong position of owning two of the four operating primary processing facilities globally," Bushveld CEO Fortune Mojapelo commented in a statement published on Thursday. 

He pointed out that, in addition to the higher production, Vametco had also achieved a 5% year-on-year decrease in its underlying production cash costs during 2019, as well as generated underlying earnings before interest, taxes, depreciation and amortisation of $42-million, despite a 35% year-on-year decrease in realised selling prices.

"All of this was achieved through the implementation of productivity initiatives implemented. We expect to see additional benefits realised and improved operational stability at Vametco during the course of 2020," said Mojapelo.

He noted, however, that the company would remain focused on disciplined cost control across the group to ensure all operations are run on a sustainable basis in the current price environment.

"Elevated production from Vametco, inaugural production from Vanchem and the execution of the Mokopane mining right is to be welcomed; however, one cannot just grow for growth’s sake. We will make sure that we will continue to be conservative in how we invest capital and ensure that any production increase is profitable, especially while the current price environment prevails.

"In financial year 2020, we will continue to ensure that Vametco maintains its competitive edge by continuing to innovate, invest for the future and optimise margins, while at the same time providing the team at Vanchem with the resources necessary to replicate Vametco’s achievements. This will allow us to build a business that is resilient throughout the commodity cycle and ready to capture the benefits of a price recovery.

"By doing so, we aim to become an even lower cost producer of vanadium, with an increasingly diversified product range, allowing us to see through short-term weakness, make decisions with the longer term in mind and provide a stable environment for the development of new downstream demand sources, such as energy storage," he added.

For this year, Vametco is expected to produce between 3 000 t and 3 200 t of vanadium, while Vanchem is expected to produce between 960 t and 1 100 t of vanadium.

Meanwhile, Mojapelo also pointed out that Bushveld's downstream vanadium-based energy storage business Bushveld Energy, had made significant progress across its key areas of focus, namely advancing the development of electrolyte production capacity, deploying its electrolyte rental model, developing energy storage mandates and launching the Vanadium Redox Flow battery (VRFB) Investment Platform as part of its strategy of developing partnerships for VRFB assembly, throughout 2019.

"Investing in the development and deployment of VRFB technology is a key part of Bushveld's strategy for two key reasons. Firstly, it will assist to increase the scale of adoption of VRFBs, which will increase demand for vanadium. Secondly, it provides a natural hedge for the company against vanadium price volatility," he noted.