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Fortune Mojapelo - Bushveld Resources - The Bushveld iron ore project in the Limpopo Province

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Fortune Mojapelo delivered the presentation at 2014 Africa Iron Ore conference. …

Fortune Mojapelo delivered the presentation at 2014 Africa Iron Ore conference.

The Africa Iron Ore conference is the annual gathering for iron ore and stainless steel executives engaged in the African Region.

For more information about the event, please visit: http://www.informa.com.au/africaironoreconference14

Published in: Business, Economy & Finance

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  • 1. The Bushveld Iron Ore Project Presentation to Africa Iron Ore Johannesburg 04 June 2014
  • 2. These presentation slides (the “Slides”) do not comprise an admission document, listing particulars or a prospectus relating to Bushveld Minerals Limited (“the Company”) or any subsidiary of the Company, do not constitute an offer or invitation to purchase or subscribe for any securities of the Company and should not be relied on in connection with a decision to purchase or subscribe for any such securities. The Slides and the accompanying verbal presentation do not constitute a recommendation regarding any decision to sell or purchase securities in the Company. The Slides and the accompanying verbal presentation are confidential and the Slides are being supplied to you solely for your information and may not be reproduced or distributed to any other person or published, in whole or in part, for any purpose. No reliance may be placed for any purpose whatsoever on the information contained in the Slides and the accompanying verbal presentation or the completeness or accuracy of such information. No representation or warranty, express or implied, is given by or on behalf of the Company, Fox-Davies Capital Limited or their respective shareholders, directors, officers or employees or any other person as to the accuracy or completeness of the information or opinions contained in the Slides and the accompanying verbal presentation, and no liability is accepted for any such information or opinions (including in the case of negligence, but excluding any liability for fraud). The Slides contain forward-looking statements, which relate, inter alia, to the Company’s proposed strategy, plans and objectives. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from such forward-looking statements. Accordingly, you should not rely on any forward-looking statements and the Company accepts no obligation to disseminate any updates or revisions to such forward-looking statements. The Slides and their contents are directed only at persons who fall within the exemptions contained in Articles 19 and 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (such as persons who are authorised or exempt persons within the meaning of the Financial Services and Markets Act 2000 and certain other persons having professional experience relating to investments, high net worth companies, unincorporated associations or partnerships, the trustees of high value trusts) and persons to whom distribution may otherwise lawfully be made. Any investment, investment activity or controlled activity to which the Slides relates is available only to such persons and will be engaged in only with such persons. Persons of any other description, including those that do not have professional experience in matters relating to investments, should not rely or act upon the Slides. The Slides should not be distributed, published, reproduced or otherwise made available in whole or in part by recipients to any other person and, in particular, should not be distributed to persons with an address in the United States of America, Australia, the Republic of South Africa, the Republic of Ireland, Japan or Canada or in any other country outside the United Kingdom where such distribution may lead to a breach of any legal or regulatory requirement. No securities commission or similar authority in Canada has in any way passed on the merits of the securities offered hereunder and any representation to the contrary is an offence. No document in relation to the Placing has been, or will be, lodged with, or registered by, The Australian Securities and Investments Commission, and no registration statement has been, or will be, filed with the Japanese Ministry of Finance in relation to the Placing or the Shares. Accordingly, subject to certain exceptions, the Shares may not, directly or indirectly, be offered or sold within Canada, Australia, Japan, South Africa or the Republic of Ireland or offered or sold to a resident of Canada, Australia, Japan, South Africa or the Republic of Ireland. The Securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “US Securities Act”) or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered or sold within the United States or to, or for the account or benefit of, any US Person as that term is defined in Regulation S under the US Securities Act. The Company has not been registered and will not register under the United States Investment Company Act of 1940, as amended. The Slides and their contents are confidential and should not unless otherwise agreed in writing by Bushveld Minerals Limited be copied, distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other person. Slide 2 2 Disclaimer
  • 3. 3 1. Introduction 2. Bushveld Complex Context 3. Geology/Resource 4. Metallurgy/Processing 5. Development Strategy Additional Information
  • 4. Introducing Bushveld Minerals * 4 April2014 ** 28 February 2014  AIM-listed Mineral Development Company developing projects in Africa  Developing an African focused diversified portfolio of quality assets in multiple commodities – iron ore, vanadium, titanium, phosphate, tin and coal  Platform strategy to deliver sufficient focus  Intent: to develop projects with Favourable Cost Curve Positioning and Scale  Projects Located in Close Proximity to Mining-supportive Infrastructure, including Rail, Power and Power  Proven team with strong credentials for project origination and development
  • 5. GREENHILLS RESOURCES LTD P-Q Iron Ore and Titanium Project Vanadium Project Imaloto Coal Project New Coal Investments Mokopane Tin Project Marble Hall Tin Project • 939 Mt multi-commodity resource (iron ore and titanium) • Phosphate resource potential of >200 Mt (avg grade ~3.24% P2O5) • World class open-castable vanadium deposit contained in 3 distinct horizons • 52 Mt vanadium-rich magnetite deposit confirmed in only one of the 3 horizons • 18,500 tonnes contained tin (Sn) inventory on 2 adjacent open- castable deposits • Estimated 2,600 – 4,500 tonnes contained Sn in a recently acquired Tailings Dump • Potential ~18,000 tonnes contained Sn resource • Historically explored by Goldfields in the 1980’s • 1 of only 3 thermal coal plays in Madagascar • 136 Mt resource (JORC Measured + Indicated category) • US$16.1 million balance sheet aimed at new acquisitions • Targeting developed near cash flow producing assets, and early- stage exploration projects Developing a multi- commodity Iron Ore, Vanadium, Titanium and Phosphate company Developing a standalone pan- African tin portfolio with a near-term production profile Leveraging strong balance sheet to develop new opportunities Company Overview Commodity-focused subsidiaries structured to deliver maximum value 5
  • 6. 6 1. Introduction 2. Bushveld Complex Context 3. Geology/Resource 4. Metallurgy/Processing 5. Development Strategy Additional Information
  • 7. The Bushveld Complex Context 7 • Platinum - >80% of world platinum reserves • Chrome - >70% of world chrome reserves Bushveld Complex is most well known for its: But it is host to: • >20Bn tonnes vanadium & titanium bearing iron ore • >30% of the world vanadium grades • >30% of the world titanium resources And thanks mainly to the platinum and chrome mining activities, the Bushveld Complex is a well established mining district with sound mining related infrastructure in place
  • 8. The Bushveld Complex Context 8 • General mining-related infrastructure in place, but geared towards the non-bulk commodities platinum and chrome • Bulk commodity logistics infrastructure capacity still insufficient • Sufficient iron ore and coal deposits make the business case for the infrastructure expansion Challenges to developing the Bushveld Complex iron ore Infrastructure Capex Market constraints • Limited market opportunities from existing downstream steel players for Bushveld magnetite concentrate – most of whom are geared for direct shipping ore and/or non-titanium bearing ores • “Dig & ship to China” model not suited to Bushveld iron ore magnetites • Implies need for integrated downstream development approaches • Known and proven processing technologies are in place, but implementing them requires large capex commitments, a new 1 Mtpa pig iron producing plant requires >$1bn capex • Higher opex compared to conventional blast furnace operations Metallurgy • Need for downstream processing solutions capable of extracting saleableFe, V and Ti to enhance economics of overall deposits • Proven processing precedents on the Bushveld Complex for iron ore and vanadium but not yet for all three - FE, V ad Ti
  • 9. The Bushveld Complex Context 9 2. A conventional steel business model under margin pressure • Excess capacity • Migration of resource rent upstream, thanks in large part to the shape of the iron ore cost curve structure But circumstances are changing …. 1. China’s diminishing power & labour cost advantages 3. Growing emerging markets steel demand … bringing new opportunities 1. Abundant coal and gas supplies – potential for affordable power 2. Opportunity for downstream integrated multi- commodity with scope for attractive margins 3. Logistics advantages for supplying into domestic and regional markets 4. South African government prioritisation of steel sector as lever for downstream manufacturing sector development
  • 10. The Bushveld Complex Context 10 e need for pre-reduction: obally rising power prices
  • 11. The Bushveld Complex Context 11 2. A conventional steel business model under margin pressure • Excess capacity • Migration of resource rent upstream, in large part due to the shape of the iron ore cost curve structure But circumstances are changing …. 1. China’s diminishing power & labour cost advantages 3. Growing emerging markets steel demand … bringing new opportunities 1. Abundant coal and gas supplies – potential for affordable power 2. Opportunity for downstream integrated multi- commodity with scope for attractive margins 3. Logistics advantages for supplying into domestic and regional markets 4. South African government prioritisation of steel sector as lever for downstream manufacturing sector development
  • 12. The Bushveld Complex Context 12
  • 13. The Bushveld Complex Context 13 1 Liquid steel refers to pre-casting/rolling product in BOF incl. by-product credits as equivalent to total cost of slabs in HRC Note: all figures based on an outside-in analysis and benchmarking subject to due diligence and confirmation. Source: CRU, Platts, Macquarie, Bryanston Research 310 475 418 630 548 523 503 452 359 538 454 Cumulative Capacity in mt 600100 200 400 500300 Steel Cost Curve
  • 14. The Bushveld Complex Context 14
  • 15. The Bushveld Complex Context 15 Keys to unlocking the Bushveld Complex Iron Ore Details Factors in favour • Raw materials – coke, coal, limestone et al • Infrastructure • South African government prioritisation of steel sector for downstream development • Economics for specialty steels favour integrated plays (distribution of resource rent) • Excellent Co-product grades, TiO2 ~20%, V2O5 - ~2% • Existing processing precedents • Favourable ore body geometry • Modular solutions available • Existing capacity installations 2. Leverage multi-commodity nature of deposit to extract credit from all or most of constituent commodities 1. Downstream integrated development path 3. Modest capex roll-out with scalability option
  • 16. 16 1. Bushveld Complex Context 2. Geology/Resource 3. Metallurgy/Processing 4. Development Strategy Additional Information
  • 17. Project Location 17  65 km west of Polokwane and 45 km north-northwest of Mokopane in the Mokopane District, Limpopo Province  Located in the central portion of the Northern Limb of the Bushveld Complex (BC) and comprises a group of six adjacent farms.
  • 18. 1 2 Infrastructure Existing mining-supportive infrastructure in the Bushveld Complex 18 • Rail: 45 km from a rail line • Port options – Mozambique (Matola) and Richard’s Bay, both undergoing significant capacity expansions targeting magnetite and coal exports) • Transnet’s ZAR300 billion (~US$30 billion) capital investment programme – ZAR201 billion targeting rail infrastructure – ZAR33 billion targeting ports infrastructure Rail & Port
  • 19. 1 2 Infrastructure Existing mining-supportive infrastructure in the Bushveld Complex 19 • 150km from new Medupi power station, • Existing transmission infrastructure within a 20 km radius of the project:  Matimba/Witkop dual 400kV lines  Witkop/PPRust 132kV line  PPRust 132kV Substation • 15km from proposed Eskom 110kV transmission line and substation from Medupi power station • Close proximity to coal fields and advanced stage IPP projects Power
  • 20. 1 2 Infrastructure Existing mining-supportive infrastructure in the Bushveld Complex 20 • Available ground water resources available to support project requirements for concentrate product • Opportunity to particpate in ~140ML/day pipeline from Flag Boshielo Dam, 80 KM from project site Water
  • 21. Slide 21 JORC Resource 991 Mt JORC compliant Resource PQ Deposit: • 939 Mt iron ore (VTM) resource – In-situ grade:33%Fe, 11% TiO2, 0,2% V2O5 – Conc grades – 55% Fe, 19.5% TiO2, 0,33% V2O5 • 440 Mt P2O5, resource avg grade 3.6% in the distinct hanging wall Vanadium Deposit • 3 distinct adjacent horizons combining >80m thickness • Initial 52 Mt JORC resource confirmed in only one horizon (MML) over ~6km strike – In-situ grade 45% Fe, 1.48% V2O5, 9% TiO2 – In-conc. grades: 56% Fe, 2.01% V2O5, 11.9% TiO2 ~1km
  • 22. Slide 22 Phosphate Zone • Up to 61m thick • 440 Mt P2O5 • Zone geologically and identifiably distinct from P-Q layer • Upgradable to >35% P2O5 with >50% recoveries Disseminated Magnetite • Avg widths of 20-30m • Average grades of c. 30% Fe • 55% Fe, 19,5% TiO2 concentrate with >80% recoveries Weathered Zone • Down to ~25m depth • Gabbroic rocks altered to washable clay • Magnetite retains magnetic properties • Resource delineated Massive Magnetite • High grade massive magnetite • Average 15m thick, avg grade 41% Fe, 14,7% TiO2 • Upgradable through DMS using coarse (~12mm and 6mm) fractions • >259 Mt total Resource (81Mt indicated) Disseminated mineralisation Massive mineralisation P-Q Deposit 4 distinct minable packages with significant upside for project economics
  • 23. * For the upper Phosphate-Zone  Two zones of rock phosphate in hanging wall of the P-Q Zone, distinct from the P-Q Zone mineralisation with distinct geological markers  JORC Compliant Inferred Mineral resource: • 440 Mt, average grade is 3.6% P2O5 (using a 3% cut-off grade), containing15.84 Mt of P2O5  >35% P2O5 concentrate achieved at 53% recoveries  Scoping study underway  Resource expected to have minimal mining costs – part of the strip for the P-Q deposit P-Q Deposit Economic Upside from Phosphate Resource 23
  • 24. Bushveld (MML) Vanadium Project 24 Deposit Resource Category Mt Fe% TiO₂ (%) V₂O₅ (%) V2O5 in magnetite Total V tonnes MML Indicated 51.81 44.7 9.7 1.48 2.01% 766.7 kt Deposit Potential Resource (Mt) Fe (%) TiO₂ (%) V₂O₅ (%) V2O5 in magnetite Est. V tonnes AB Zone ~60* 28.8* 6.15* 1.17 * 2.38% ~1 Mt* Deposit Potential Resource (Mt) Fe% TiO₂ (%) V₂O₅ (%) V2O5 in magnetite Est. V tonnes MML- HW >250* 10-15* 2-3* 0.3-0.4* 1.5-1.7%* > 750 kt* * Grades are estimates based on boreholes drilled and do not represent a resource statement •World class open-castable vanadium deposit contained in 3 distinct horizons combining >80m thickness , including the MML •Initial 52 Mt vanadium-rich magnetite deposit confirmed in only one horizon (MML) over ~6km strike (average V2O5 in-situ grade of 1.48%) Vanadium Project
  • 25. Total V2O5 contained in resource (area of circle) 1. Bushveld Vanadium (South Africa) 2. Maracas (Brazil) 3. Barrambie (Australia) 4. Mustavaara (Finland) 5. Rhovan (South Africa) 6. Mount Peake (Australia) 7. Windimurra (Australia) 8. Balla Balla (Australia) 1a – Potential for Bushveld Vanadium incl. MML and AB Zone 1b – Potential for Bushveld Vanadium incl. MML, AB Zone and MML-HW Global Vanadium Projects Bushveld vanadium grade in top tier of projects worldwide 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 1.80% 0 100 200 300 400 500 600 700 800 900 1000 Averagein-situgrade Total Ore Tonnage (Mt) Bushveld Vanadium Deposit Comparison 2 3 5 4 6 7 1b 1 8 1a Grade – tonnage trendline Source: Company market announcements, Annual reports 25
  • 26. A growing vanadium producing region: - Located in world class vanadium bearing geological zones with several operational projects 26 Bushveld Vanadium World class deposit in highly mineralised area
  • 27. 27 1. Bushveld Complex Context 2. Geology/Resource 3. Metallurgy/Processing 4. Development Strategy Additional Information
  • 28. Metallurgy - Concentrate 28 • Similar minerology for both P-Q and MML Zone • Similar process flow sheet for producing concentrate – using magnetic separation or dense media separation • Good concentrate grades achieved for both the P-Q and MML ores:  P-Q • Concentrate grades of ~55% Fe, 19.0% TiO2 and 0.33% V2O5 (>80% recovery) at 500 μm • High-grade Q2 unit of the P-Q Zone can be beneficiated at coarse grain sizes - 6mm fraction ‘concentrate’ product grade achieved: ~50% Fe, 18.5% TiO2, and 0.33% V2O5 (~75% recovery)  MML • Davis Tube Tests undertaken on the MML and AB Zone returned encouraging results as shown by the concentrate grades below: – MML: 2.01% V2O5 , 56.86% Fe and 11.90% TiO2. – AB Zone: 2.38% V2O5, 54.90% Fe and 9.91% TiO2 • Plant Design - Simple design - crush, mill, magnetic separation and flexible plant – can accommodate all ore types (fresh, weathered, massive, disseminated)
  • 29. Pyro-metallurgy : Bushveld Vanadium Project 29  Two pyromet processing routes, both with existing operational precedents based on Bushveld vanadium bearing magnetite  Examples: Highveld Steel & Vanadium Examples: HRhovan, Vametco, Vanchem Option 1 – Option 2 –
  • 30. Pyro-metallurgy : Bushveld Vanadium Project 30  Examples: Highveld Steel & Vanadium Flowsheet characteristics • Applicable only to the MML Deposit • Simple flowsheet • Relatively low capex (~US$160m for 5,000 ton V2O5 production capacity) • Exposure to the V2O5 market • Iron oxide calcine (~55%Fe) could be monetised • Calcine contains sodium, sulphur & vanadium – impact on use in iron making Option 1: Smelting Route for steel/pig iron & vanadium recovery (e.g. Highveld Steel & Vanadium)
  • 31. 14 Vametco plant Bushveld Vanadium Possible processing routes selected from existing operations Option 1 – Salt Roast Process for treatment of Vanadium Slag/Fines Currently operating mines are processing similar types of ore to that of Bushveld’s and probable processing routes have been identified:
  • 32. Pyro-metallurgy : Bushveld Vanadium Project 32 Option 2: Smelting Route for steel/pig iron & vanadium recovery (e.g. Highveld Steel & Vanadium)  Examples: Highveld Steel & Vanadium Flowsheet characteristics • Pre-reduction to lower electrical energy consumption – 60-70% iron metallisation, no vanadium reduction • Highly reducing furnace conditions to reduce vanadium oxide – Minimise reduction of Titanium (0.2% Ti in metal) – Controlled reduction of silicon (0.2% Si in metal) • Hot metal treatment to produce vanadium slag and lean pig iron • High capex (>US$1Bn for ~1Mtpa pig iron + ~10,000 t FeV production capacity • Economics benefit from two revenue streams (Fe and V, and possibly Ti as well
  • 33. 19 2014 Highveld: Iron Plant 1 and Steel plant Bushveld Vanadium Possible processing routes selected from existing operations Option 2 – Highveld Process for Vanadium Slag Currently operating mines are processing similar types of ore to that of Bushveld’s and probable processing routes have been identified: Kilns Shaking ladles + BOFs Steel castingMills (Structural + Flats) Furnaces 33
  • 34. Pyro-metallurgy : Bushveld Vanadium Project 34 21 Integrated production of V2O5 and pig iron Ore preparation Roasting kiln Leaching & precipitation Ore preparation Pre-reduction Smelting Ladle treatment V slag Calcine V2O5 Pig iron MML con MML chips Medium grade TiO2 slagPhase 2 Phase 1 Scope for integrating the 2 flowsheets
  • 35. 35 1. Bushveld Complex Context 2. Geology/Resource 3. Metallurgy/Processing 4. Development Strategy Additional Information
  • 36. 36 Economic and Project Design considerations MML and P-Q Zone deposits • Shared mining and processing infrastructure • Leverage multi-commodity nature of resource and maximise economics from all commodities Iron, Titanium, Vanadium, Phosphate • Target a modest initial phase with low capex • Leverage any existing processing infrastructure in country already • Maximise on shared beneficiation processes to optimise capex • Targeted Strategic partnerships for Phosphate, P-Q Project, and Vanadium project
  • 37. 1 2  Study undertaken on the P-Q Zone only and on only 12% of the total JORC resource (JORC-compliant 718 Mt resource)  Low capex and concentrate product route at base case RoM of 5 Mtpa underscores viability of project  Pre-feasibility study underway  Attractive operating costs: US$51 / tonne, (US$6/tonne when adjusted for titanium and vanadium credit)  Significant upside from: • volume scale up, • downstream development, • developing the vanadium-rich MML deposit , • developing the phosphate resource Bushveld Iron Ore Project – 5 Mtpa Run-of-Mine Item Unit Value Total Mill Feed LOM Mt 87.53 Run of Mine Mtpa 5.0 Product (Concentrate) produced Mtpa 2.20 Strip Ratio waste:ore 1.36 Gross Revenue LOM US$’m real 2 929 Royalty LOM US$’m real 160 Net Revenue LOM US$’m real 2 769 Operating Costs LOM US$’m real 1 469 Capex Initial Sustaining US$’m real US$’m p.a. 125.8 2.5 Cash flow LOM US$’m real 476 NPV @ 10% real @ 12.5% real IRR real US$’m US$’m % 188.4 139.8 34.2% Payback (based on discounted cash flow) Yr 2 years Life of Mine Yr 18 Scoping study delivers an initial low capital expenditure (“capex”) project which results in first phase cashflows that can be leveraged to unlock the larger potential inherent in exploiting the deposit along strike and to lower depths, as well as pursuing downstream beneficiation opportunities Scoping Study Results Low capex base case scenario yields positive economics 37
  • 38. 2014 2015 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Bushveld Iron Ore (P-Q) Project Iron Ore Resource update ✔ P-Q Scoping Study ✔ Iron Ore metallurgy (pyro-met) update Revised P-Q Scoping Study (incl. downstream) Pre-Feasibility Study Secure strategic partner for iron ore projects Bankable Feasibility Study Bushveld (P-Q) Phosphate Phosphate resource definition & metallurgy ✔ Scoping Study Pre-feasibility Studies Secure strategic partner Bushveld Vanadium Project Resource Definition (AB Zone & MML-HW) Detailed metallurgy (incl pyrometallurgy) Scoping study Pre-feasibility Study/Feasibility Studies Development & Production Milestones 2013 - 2014 Strong pipeline of news to follow 38
  • 39. Attractive cost curve proposition • Opportunity to leverage multiple revenue streams to optimise cost curve positioning (Vanadium, Titanium, Phosphate) 1 Bushveld Iron Ore Project Investment case Project boasts attractive economics with significant upside potential 39 2 3 Pragmatic executable path to production Scale potential • Modest capex requirements + simple operational model creates opportunity for early realisable cash flows • Cash flows can be leveraged to develop project more fully • Opportunity for economies of scale • Creates scope for strategic partnerships with majors • Creates multiplicative value impact
  • 40. Thank You 40
  • 41. South Africa Ground Floor, Block A 24 Fricker Road Illovo, 2116 Tel +27 11 268 6555 Fax +27 11 268 5170 41 Contact
  • 42. Steel industry driven rising Intensity of vanadium use in China • Vanadium-containing steel sub-sector steadily growing and expected to rise further due to shift from low to high- strength steels • Steel-specific vanadium consumption estimated to grow with CAGR of 4.8% over the period 2010 to 2015, with over 80% of growth occurring in the BRIC countries • Total vanadium demand growth forecast to be greater than 6% between 2009 and 2019 • Chinese is dominant driver of vanadium consumption growth in 2011 to 2016 period • Structural efforts to increase share of high value-added, micro-alloyed steel coupled with technical and political limitations will result in steady increase in vanadium intensity of use • Chinese government policy-driven shift to use of high strength rebar will restrict and gradually eliminate the use of lower strength bars by 2015 expected to drive increase in vanadium content in steel rebar • Chinese consumption share of vanadium to increase from 36% in 2011 to 45% in 2016 • Global demand to rise at a CAGR of 6.9% over the 2011 to 2016 period The Vanadium Market Chinese intensity of vanadium use to increase 42
  • 43. The Vanadium Market Chinese intensity of vanadium use to increase 43 Chinese government policy-driven shift to use of high strength rebar will restrict and gradually eliminate the use of lower strength bars by 2015 expected to drive increase in vanadium content in steel rebar
  • 44. The Vanadium Market Chinese intensity of vanadium use to increase 44 Chinese government policy-driven shift to use of high strength rebar will restrict and gradually eliminate the use of lower strength bars by 2015 expected to drive increase in vanadium content in steel rebar USA Europe Japan China China (2016) 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 0.000 0.010 0.020 0.030 0.040 0.050 0.060 0.070 0.080 0.090 Vconsumptiongrowth(t) Kg of Vanadium used per tonne of steel Projected Impact of China's Increased Steel Standards (2013)
  • 45. Vanadium is a niche metal with high-end uses and significant upside Steel industry vanadium consumption – by region 0.09 0.08 0.07 0.06 0.05 0.05 0.04 0.03 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.10 North America Europe Japan CIS World Average Other China India Kg V/t •China’s current low specific vanadium consumption rates are rising Source: TTPSquared, Inc 45
  • 46. “Vanadium Redox Fuel Cell – that’s one of the coolest things I’ve ever said out loud” - President Obama (Forum on Small Business, Feb 2011) Energy Storage • Average change in vanadium demand in energy storage consumption estimated at 42.1% CAGR from 2011 to 2016 • Major drivers of vanadium demand growth in mass energy storage: ―Hybrid and electric cars (each car needs approximately 15.4 lbs of vanadium ―Household vanadium battery storage unit (each 50 kwh per day unit needs approximately 440 lbs) ―Large scale power storage (each 1 GWh vanadium redox battery (VRB) requires 4 kt of pure vanadium) • VRBs can absorb and release massive amounts of electricity instantly and do so repeatedly, making it the only battery technology capable of connecting directly to power grids and streamlining intermittent flow of energy from wind turbines and solar cells The Vanadium Market Two key industries: Steel and Energy Storage 46