Bushveld Minerals acquires Vametco, finalises transformation into vanadium producer

Vanadium and coal development company Bushveld Minerals completed its acquisition of 55% of Bushveld Vametco on Thursday, giving it a 59.1% stake in the firm's South African mining and processing operations.

Bushveld acquired the entire issued share capital of Vametco not owned by Yellow Dragon Group for an initial purchase price of $11.1m to be satisfied in both cash and shares.

The acquisition marked the final step in Bushveld's quest to become a producer of vanadium, a substance which has seen its price skyrocket after predictions that the metal would be used as an electrolyte for electricity storage at power stations.

Vametco is in possession of 3.5% of the global vanadium market share but highlighted the potential to expand its production to in excess of 5,000 metric tonnes of the metal every year over the next three years.

Chief executive Fortune Mojapelo said: "Vametco has, to date, illustrated its strong cash generation capability and, with the expansion initiatives underway, the drive towards a lower cost base which, in a rising vanadium price environment, ensures the transaction is value accretive to our shareholders. We go into 2018 in a strong position and look forward to the future with confidence."

At 1115 GMT, the shares were up 2.29% to 8.95p.