Aim-listed Bushveld Minerals has begun work on cost-cutting initiatives and development works to return the company to profitability and secure Bushveld's long-term future.

The company said on September 10 that this decision was driven partly by global market conditions, but also by the recent decision to focus on its core operating asset Vametco, while disposing of other assets, including its downstream energy assets, the Mokopane development project, and Vanchem.

On September 2, the company announced that it had received the $10-million in matched funding from Orion Mine Finance (OMF) Fund III, providing the working capital to reduce long outstanding creditor balances and allowing management to focus on reducing costs and sustainably increasing current production rates at the Vametco mine and production facility in the North West.

Bushveld said it was pursuing a multipronged approach to reducing costs and maintaining Vametco's production.

This includes reducing the current labour complement at both Vametco and head office to ensure a fit-for-purpose structure enabling the long-term sustainability of the company. In this regard, Section 189 notices will be issued to affected employees.

"These initiatives are vital to ensure a sustainable long-term business for the benefit of all stakeholders, from those that work at and live near the mine, to those that have provided the vital funds required for Vametco to stay in business within this prolonged, weak pricing environment," Bushveld Minerals CEO Craig Coltman said.

The company will also be reducing costs by transferring purchases of certain goods and services to longer-term contracts, thereby fixing costs and providing the opportunity to negotiate lower prices with preferred original-equipment manufacturer (OEM) suppliers.

Bushveld said it was also reducing raw material consumption by ensuring assets are running efficiently according to OEM specifications, and that several initiatives for yield improvements from kiln to finished goods would be implemented, improving production on a fixed-cost base.

The company is also aiming to increase the capacity of the Barren Dam at Vametco, which remains an important debottlenecking project that will start in the first quarter of next year.

In total, Bushveld expects these initiatives to have the potential of achieving savings of between $8-million and $10-million on an annualised basis by the end of 2025, thereby materially reducing the cost base at Vametco and ensuring its competitiveness as one of only four primary vanadium facilities globally.

The company said it would continue to prioritise sales into higher-value markets, such as nitro vanadium in North America.