Bushveld Minerals is strengthening in vanadium.

The mining operator announced on Wednesday the takeover of several South African assets in the production of vanadium, a rare metal mainly used in alloys.

The agreement, valued at US$68 million, includes Vanchem Vanadium Products’ vanadium and ferrovanadium production activities and 100% of the outstanding shares of Ivanti Resources, a subsidiary of the Luxembourg holding company Duferco Participations. « In line with our previously announced objectives, we are pleased to acquire another site operating asset[…] in South Africa, in order to consolidate our position as the world’s leading producer of vanadium and to be able to achieve our production target of 10,000 metric tonnes of vanadium per year, » said the company’s CEO, Fortune Mojapelo, in a statement. Understandable satisfaction: with this transaction, Bushveld Minerals is doubling its vanadium processing capacity in South Africa and reinforcing its long-term strategy of acquiring quality assets at low cost.

The Vanchem processing plant is located 200 km from Bushveld Minerals’ Mokopane project, which will be the main source of ore. A geographical proximity that, according to the CEO, »[should] significantly reduce the capital required to bring[the Mokopane project] into production ». As for the refurbishment of the three dryers of the acquired facility, planned over five years, it should cost an additional $45 million, with financing coming from « existing resources, future cash flows and credit facilities under negotiation », says the company, which is carrying out this transaction in a particularly favourable environment: driven by growing demand, particularly from the steel sector (more than 80% of world needs) and limited new supply in the near future, vanadium prices have increased by more than 220% since November 2015.

Vanadium, a highly volatile rare metal (ferrovanadium price 80%, in dollars/kg).