Mapochs Iron-Vanadium Mine to Hit the Auction Block

The South Africa-based Mapochs iron-vanadium mine will be put up for auction next Thursday (September 14), Pieter Geldenhuys of auction and property trading company BiddersChoice confirmed this week. 
Mapochs was owned by Evraz Highveld Steel and Vanadium before the company filed for business rescue in 2015. The mine is currently in provisional liquidation with its mining right intact. The successful bidder will have to apply to have its mining license transferred under Section 11 of the Mineral and Petroleum Resources Development Act.
Parties wishing to participate in the auction are required to deposit 50 million rand into their attorney’s trust account by this Friday (September 8), BiddersChoice says in an auction document. That amount will be used as an opening bid. Mapochs’ provisional liquidators have reportedly rejected two signed offers for the mine in an effort to make the sale a fair process.

Vanadium prices are currently trending upward, spurred in part by policy changes in China. Metal Bulletin says that on Friday (September 1), European ferrovanadium prices were trading between $42.85 and $45 per kilogram, up slightly from their previous level. Meanwhile, vanadium pentoxide prices were trading between $11 and $11.25 per pound in-warehouse Rotterdam.
Across the ocean, ferrovanadium prices were trading between $18.75 and $20.75 per pound in-warehouse Pittsburgh last Thursday (August 31). In China, ferrovanadium prices sat between $55 and $60 per kilogram, with vanadium pentoxide going for $12.30 to $13 per pound.
Vanadium pentoxide, a compound of vanadium and oxygen, is the main precursor to vanadium alloys like ferrovanadium, and is widely used as an industrial catalyst. Over 90 percent of ferrovanadium, an alloy of iron and vanadium, is used by the steel industry.
As prices increase, interest in vanadium is rising, with some market watchers predicting continued upward momentum. “There are fundamental supply and demand issues that have driven the re-rating,” Julian Treger of Anglo Pacific Group recently told the Financial Post, adding, “[p]rices could go higher.” Roskill’s Jack Bedder has also expressed some positivity about prices.
China was the top vanadium-producing country in the world last year by far, putting out 42,000 MT of the metal. Russia was a close second at 16,000 MT, while South Africa was third with 12,000 MT. South Africa was in second place prior to the closure of Mapochs; currently only two companies produce most vanadium in the country, with one being major miner Glencore (LSE:GLEN).
Thus far BiddersChoice has not indicated which entities may be interested in bidding for Mapochs. There has also been no indication of whether the mine could be brought back online.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.