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. CO₂ emissions will be reduced by more than 8,000 metric tonnes per year and over 200,000 tonnes of CO₂ 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: [email protected]

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   

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 

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.