During FY 2014, Vanchem recorded an improvement in production output by 6%, compared to FY2013. Production output is, however, still recorded at 77% of the theoretical output. Towards the latter part of the year, modifications, were implemented on Kiln 1 which had been recording very low extractions. These improvements are already evident in the months following the modifications with extractions improving significantly.
The utility supplies from the local municipality improved compared to previous years.
Concerns still remain relating to the maintenance of the railway line under the local municipality’s responsibility which impacts the delivery of primary raw material from Mapochs Mine. The Railway Safety Regulator closed the line on several occasions during the year due to safety concerns.
A negative impact, with possible long-term effects, came from the national electricity supplier, Eskom, who reintroduced load-shedding, last seen in 2008/09. This has a severe impact on production and measures to lessen this are being implemented.
FY 2014 was a challenging year on the labour front. The multi-year Industry wage agreement came to an end and the whole country was severely impacted by large-scale strikes during the negotiation period for a new agreement. Vanchem managed to negotiate and implement a wage agreement with minimal disruptions to the operations.
Improved cost control measures were implemented in FY 2014, resulting in the cost of production being reduced by 8% from FY 2013. This drive will be continued in the coming years.
The market conditions remained tight, with market prices peaking at $27.19/kg V in May 2014 and then steadily decreasing to $25.52/kg V at the end of September 2014. FY 2014 saw new companies entering the vanadium market and this will put a further strain on an already-tight market.