Bushveld makes follow-on investment in Enerox
Vanadium production and energy storage company Bushveld Minerals updated the market on its 84%-owned subsidiary Bushveld Energy and its investment in vanadium redox flow battery manufacturer Enerox on Thursday, reporting that a consortium of investors in Enerox Holdings (EHL), which wholly owns Enerox, was investing $30m (£21.7m) to scale up production capacity to 30MW by 2022.
The AIM-traded firm has an indirect interest in Enerox of 25.2%, through VRFB Holdings, which owns 50% of EHL.
It said it would contribute its share of the investment of $7.5m, consisting of $5m paid on 31 March, and $2.5m payable during April.
Bushveld said its funding strategy for Bushveld Energy was to promote self-funding and funding sharing with external partners, including its follow-on investment in Enerox.
Self-funding options being realised by Bushveld Energy included proceeds of the sale of a portion of its holding in Invinity Energy Systems.
The investment was in line with Bushveld's strategy to mobilise capital to scale-up growth and manufacturing capacity of vanadium redox flow battery (VFRB) manufacturers, the board said.
“Investing in VRFB manufacturers is a part of Bushveld Energy's strategy, designed to play a catalytic role in mobilising third-party capital to assist VRFB manufacturers scale up of sales and manufacturing capacity in order to meet the fast-growing demand for long duration energy storage solutions,” said chief executive officer Fortune Mojapelo.
“Our first investment of $5m in Invinity played a critical role in establishing Invinity out of the merger of Avalon and RedT, and allowed it to access follow-on funding from the equity capital markets, establishing a leading VRFB player.
“In addition, to a healthy return from Bushveld's $5m investment, the success of the investment in Invinity is evidenced by its AIM listing with a healthy greater-than-$150m market capitalisation and a well-funded programme to scale up its production capacity to support a solid pipeline of announced VRFB projects.”
Mojapelo said Bushveld’s investment in Enerox followed the same script of mobilising third-party financing to scale-up manufacturing capacity and sales, while establishing a platform for collaboration in developing projects into which the firm would supply vanadium.
“The funding commitments of Enerox's shareholders are a strong vote of confidence in the potential and strategy of the company.
“We believe that this additional capital will place Enerox on the path to becoming a major player in the industry.
“It further cements VRFB technology in the rapidly growing stationary energy storage sector.”
The sell down of its Invinity stake was described by Mojapelo as “no reflection” of diminishing faith in its potential.
“We are proud of its achievements and continue to cooperate on other topics, including vanadium supply, vanadium electrolyte rental and the overall growth of the VRFB industry.
“Our decision is rather informed by our conservative capital allocation strategy across the group, which focuses resources on our mining and processing operations and seeks to place Bushveld Energy on a path to self-fund its future plans.”
At 1550 BST, shares in Bushveld Minerals were up 8.63% at 17p.