This is what the future of power in Africa looks like
SA miners are supplying raw materials for, and gearing up to manufacture, batteries with grid-scale uses
Flying largely beneath the local radar, SA is stepping up its importance in the global batteries and steel markets.
Firstly, there’s Bushveld Minerals, a company traded in London but with complete vanadium production exposure to SA. Vanadium is largely used in the making of steel, but an important vanadium redox flow battery market is developing – one that Bushveld is targeting using production from its mine and processing plants.
Bushveld is an extremely rare business in this regard. It has the capacity to mine, process and, soon, to beneficiate its vanadium – not only tapping into a mine-to-market strategy but also ticking a big box in the government’s drive to add value to its minerals.
Bushveld is building a $10m plant in East London to produce vanadium electrolytes, which is the core of the redox flow battery technology.
Assuming it wins big orders from Eskom and other power utilities in Africa and elsewhere for its batteries, Bushveld will build a manufacturing plant in SA, offering a complete package that few if any other companies have.
Bushveld has just signed a deal that will double its production to 10,000 metric tons of vanadium a year in the near term. While that doesn’t sound like a lot, the global supply of vanadium is roughly 90,000 tons a year, making Bushveld a serious player in the market.
Secondly, there’s Thakadu Group, a brand new company that is in a nickel offtake deal with platinum miner Lonmin. Thakadu will supply 25,000 tons of high-quality nickel sulphate into the global market, tapping into the makers of lithium-based batteries. The low-cost supply of nickel from Lonmin as a byproduct of its platinum group metals business sets Thakadu apart and makes it globally competitive.
It would be an opportunity for SA investors if Bushveld and Thakadu were to list on the JSE, giving locals a chance to benefit from these low-key but important assets.