A comprehensive update on what being an investor in @BushveldMin_Ltd means for today and tomorrow.
"VRFBs that use #vanadium that we produce and the electrolyte that we manufacture, even if they were made elsewhere, will carry more than 50% local content"
#BMN 21st Jan ESP 2nd Stakeholder Consultation presentation ;
"If local content in the Eskom Battery programme achieves the 40-50% level, as was prescribed during REIPPP, from the start, it will accelerate the manufacturing and investment business case"
Meaning if @BushveldMin_Ltd win sufficient large scale battery mandates from the Eskom BESS Project, it will accelerate electrolyte manufacturing and ultimately drive the investment decision to move those "elsewhere" #VRFBs a lot closer to the contract source.
Where I am struggling @BushveldMin_Ltd, is how does one winning bidder on 800MWh of batteries, build out capacity fast enough, from a 200MWh standing start?
"Investments into battery companies will also take place in an effort to establish a platform that will be used to mobilise other funding from third-party sources to support the upscaling of VRFB manufacturing in South Africa."
The above statement if quoted correctly, lends itself to 1 of 2 outcomes ;
1. An investment in UET to help drive future S.A. based #VRFB manufactuing.
2. An existing (pending) VRFB OEM investment partner, will be supported in this.
I may well be proved wrong but right now I very much like the look of Enerox as the first S.A. based #VRFB manufacturer, which places them in position A, as the technical 'partner' for any assault on the Eskom BESS Project tender.
1/16
It's difficult to call this market but my view is that assuming no more operational glitches #TGR now steadily re-rates as the operations sign off the various stages to 30ktpa.
2/ Front-end valuations should depend on where graphite prices go but as Syrah demonstrated yesterday (graphite fines not large flake) orders are buoyant.
Forward orders there running at 90,000 tons which are 50% of their current yearly output. So substantial.
3/ Note also Syrah cannot produce for less than FOB C1 $543/t even at 15,000 tons per month output and that's fines.
It is clear after last night's presentation that TGR C1 costs have also risen but this is to be expected in this current market.
1/12
Here are Verde Agritech's expected sales targets for 2022 which were revised in May and offer a significant read across to #HMI and what it can achieve this year and also.
1/9 In a previous #HMI thread, I highlighted that the $600k write-down in the FY2021 accounts meant that trade debtors (so effectively trade receivables) almost doubled between YE 2020 and YE 2021.
1/18
I've been running an extensive exercise on Verde Agritech also a relatively new but expanding fertiliser producer based just c. 70km from #HMI in Minas Gervais in Brazil. The results to date are rather fascinating and certainly worthy of review.
2/ Verde is a TSX-listed producer with a current plant capacity nearly double the size of HMI (0.6Mtpy) but with a phase 2 expansion due to come online in 2023 which would take output to 2.4Mtpy.
So a much bigger operation to come and soon.
3/ Those that remember my 5th July numbers on #HMI sales prices will perhaps remember that they demonstrated a $53.20/t average sale price for 2021.
At the average achieved AUD/BRL for 2021 of 4.054, this equated to an average price of BRL216.
1/7 Based on what I have just talked about if #HMI had received all the monies from its sales in 2021 then this would have amounted to $4.52m and the business would have been profitable at the operating level in 2021.
2/ What's more, the $4.454m paid out in 2021 reflects more accurately the true costs to run the business over the course of one year.
One cannot conclude exactly how much HMI produced in 2021 because the cash receipts reflect payment dates and not when the goods were received.
3/ Inventory was fairly minimal which reflects an operation that leans towards producing to order.
However, the costs associated with administration clearly eat up the vast majority of this with the consolidated statement accounting for c. $3.85m in the period.