Refinery’s $200m backing
A COMPANY planning a $2bn battery metals refinery in Townsville has Canada’s export credit agency EDC as a potential $200m backer of the project.
Queensland Pacific Metals has revealed EDC’S interest in an update to the ASX.
The company has already gained US car giant General Motors and Korea’s battery and industry heavyweights LG Chem and POSCO as major shareholders but still faces a mountain to climb to secure funding and start construction in the Lansdown Eco-industrial Precinct, targeted for the middle of this year.
QPM wants to produce nickel and cobalt sulfates for electric vehicle batteries as well as hematite, high purity alumina and magnesium oxide.
In its update, QPM says EDC has provided a non-binding letter of interest to support the Townsville Energy Chemicals Hub with possible lending of up to $200m over nine years.
It says EDC’S interest is for potential equipment and services supply from Canadian companies for the project’s construction.
The financing is subject to due diligence.
QPM announced the agreement with General Motors last year in which the car maker invested about $28m for an almost 10 per cent stake in the company to secure sulfate supply with possible further investment of up to around $82m.
LG Chem and steel producer POSCO took a combined 10 per cent stake for an investment of almost $20m in QPM in 2021 and signed binding offtake agreements for the sulfates.
QPM says its debt financing strategy has been to target a debt syndicate largely consisting of government-backed lenders led by Australian agencies, Export Finance Australia and Northern Australian Infrastructure Facility.
It says debt financing initiatives have resulted in a $250m indicative financing letter of interest received from EFA, the completion of a strategic assessment phase with NAIF and an indicative letter of support from the Korea Trade Insurance Corporation.
RPM Global has been appointed as Independent Technical Expert for the debt syndicate and has started technical due diligence on the refinery project.
The development would provide a huge boost to Townsville, creating hundreds of construction jobs over the next two years.