Thread by @BigBiteNow

1/9
From the #IES interims today ;

"Core sales markets identified; US West Coast, UK, Australia and South Africa"

Reading through the report, I can find only 1 direct ref. to why South Africa is now core but most interesting it is S.A. and not Africa in general.

#BMN

2/9
Given that in Sept IES signed an electrolyte rental agreement with BMN, it is important to keep tabs on their progress.

So its good to see that contracts running from closed through to "a strong chance of close in the immediate term" (upside), now number c. 57MWh.

3/9
That's good progress given the fact that the electrolyte rental agreement is only just being introduced and so has yet to really affect those numbers.

All that aside, my reading is that a clear move is being made to take advantage of the BMN cost advantages and

4/9
there's no better place to exploit that strength than in S.A.

We mustn't forget what Prrsident Ramphosa has recently doubled down on.

"energy self-generation projects above 1MW will be fast-tracked, to take the pressure off Eskom."

5/9
Here's that 1 direct ref. i was talking about.

"very high electricity tariffs are making a compelling case for such "grid defection."

Right now, IES numbers remain constrained but it is clear where we are now heading.

c. min. 285mtV in those 57MWh of IES contracts.

6/9
BMN have first refusal on vanadium supply to all IES projects, be it the rental agreement likely will seal many deals.

So we are talking c. 8% of expected BMN production in 2020 and that's before we add Enerox to the mix.

Not a bad start with exponential growth expected.

7/9
As IES says, these projects are being driven by such things as ;

"the need for rapid change to global electrical infrastructure, the amount of renewable generation that can be deployed is becoming increasingly limited without incorporating storage"

Add to this lower costs,

8/9
fear of blackouts, fear of climate change etc etc.

What we then see is a demand profil that in't being driven by economic success but by sheer need. So it sits outside any economic cycle, meaning it won't fall away.

There will come a point where the market will begin

9/9
to appreciate this diversification away from steel and the fact that BMN, with its first mover status, is/has created a vanadium business, that is shielded from the economic cycle of mining.

I don't intend joining for the rush, so i buy now and i wait.