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South Africa’s energy storage opportunity

The year 2020 saw African economies and mining companies battling to stay on course due to a global pandemic.

It has become urgent for South Africa to unlock the potential of sectors that can enable new industries. In order to meaningfully participate in the post Covid-19 economic recovery efforts that all economies are focusing on, a ripe opportunity lies in accelerating investment in the energy storage value chain.

Here is why the energy storage market is exciting:

  • Electrification of almost everything is driving up electricity’s share of how the world consumes energy and driving up the demand for electricity
  • The energy transition towards cleaner electricity sources has begun across many countries in the world
  • There is a disruption of the traditional utility model for electricity provision, characterized by growing distributed generation solutions and financial pressures on utilities combining to bring private sector participation at a scale not seen before

Electricity’s share of how the world consumes energy has doubled from 10% to 20% between 1980 and today and is set to grow to 45% by 2050. A large share of this growing electricity demand will be met by renewable energy sources.

This growing energy storage market presents a unique opportunity for Bushveld Energy, a subsidiary of Bushveld Minerals. Bushveld Energy is a leading energy storage solutions provider and is focused on developing and promoting the role of vanadium in the growing global energy storage market through application in vanadium redox flow batteries (‘VRFBs’).

From a vanadium point of view, South Africa hosts three of the four primary vanadium processing facilities in the world, of which Bushveld Minerals owns two. The country is blessed with many other of the world’s largest and highest-grade resources which are set to play a critical role in the value chain of the global battery industry, including platinum group metals, nickel, manganese, copper and cobalt. All these metals have a demand profile that is anchored in a decades-old, if not century old applications in the steel industry, and more exciting are now in use in newer applications in electronics and batteries.

Simply put the potential for battery metals, such as vanadium, lies in their ability to solve seemingly simple challenges for global economies, such as ensuring that electricity is made available sustainably and on demand, whether generated by coal, solar or wind.  

To be clear, the opportunity is distinct from the past. Where historically the industry in South Africa has been content with mining and shipping ore to other markets for processing, it is time to develop vertically integrated opportunities that maximize South Africa’s share of the value chain. It is big enough to require a master plan. What is more? South Africa already has a lot of the metallurgical infrastructure that can be leveraged to create or expand the downstream capabilities required. Not only infrastructure, but also metallurgical expertise and Research and Development platforms that to date have been underutilized. This will ensure that significantly more investment is put towards building and revitalisation of processing infrastructure and metallurgical expertise, and thus grow local mining and processing capacity to meet the increase in demand for these metals.

To achieve this reality, all stakeholders; whether funders, private business, government or research institutions must take responsibility for their role in ensuring that certain key actions are prioritised as the implementation of South Africa’s economic recovery plan takes center stage. South Africa must focus on its ability to turn the mineral wealth in the soil into a fully charged and sustainable new mining industries, such as the energy storage sector.  So far South Africa’s forward-thinking Integrated Resource Plan (IRP) and Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) which details the country’s plans to create one of the largest energy storage markets in the world is a good example of what the government is already doing to ensure that opportunities in the energy value chain are maximised.

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