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Bushveld Minerals (BMN) Shares Are Down 22.9% in 2021, Can They Bounce Back?

Simon Mugo trader
Updated 11 Jun 2021

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Shares of Bushveld Minerals Limited (LON: BMN) are down 22.9% this year, with the latest decline fueled by the lower production figures reported in Q1 due to the 35-day maintenance shutdown Vametco plant.

On the bright side, the miner reported that it had completed the scheduled maintenance on time and within budget, demonstrating the fiscal prudence of its management team. However, investors paid more attention to the lower production figures.

Since January, the vanadium mining company’s shares have fallen significantly but have been trading sideways for the past few months as the bulls and bears fight to control the share price.

The markets seem to have discounted the fact that global demand for vanadium has risen significantly since last year and is projected to keep rising over the next few years, given the metal’s use in vanadium redox flow batteries (VRFBs).

Bushveld Minerals shares have been falling despite its positive milestones, including its $7.5 million investment in Enerox GmbH, a vanadium redox flow battery (VRFB) manufacturer.

The company’s investment in the VRFB manufacturer is about to pay off significantly after the South African government raised the threshold for companies to produce and store their power without a license up to 100MW from the previous 1MW limit.

Most South African businesses cheered the government’s policy shift given that it will allow more companies to quickly generate their electricity plugging the country’s massive electricity deficit.

Bushveld Minerals is set to benefit from the new policy given its investment in VFRB manufacturers, whose batteries shall be used to store the electricity generated by private businesses.

I’m still long-term bullish on the company, and the sideways trading is quite frustrating. Still, the company’s fundamentals remain solid, which bodes well for its investors over the long term. In addition, BMN shares are currently trading at support and could rally higher if the level holds.

*This is not investment advice.

Bushveld Minerals share price.

IG chart of Bushveld Minerals share price 11-06-2021

Bushveld Minerals shares are down 22.87% so far this year and are trading at support. Can they bounce back?

Should you invest in Bushveld Minerals shares?

Bushveld Minerals shares are traded on the London stock exchange's AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are Bushveld shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies

Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading