First Quantum Minerals Ltd. has announced that it has entered into a binding agreement to sell a 30% equity interest in the Ravensthorpe Nickel Operation in Western Australia for cash consideration of US$240 million to POSCO, one of the world’s largest steel producers.
First Quantum will retain a 70% interest in Ravensthorpe and continue to be the operator. The proceeds of the transaction will be used to reduce the company’s debt. In addition to the transaction, POSCO and First Quantum have also agreed to evaluate a strategic partnership to produce battery precursor materials from production at Ravensthorpe.
Under the terms of the transaction, POSCO will acquire a 30% equity interest in Ravensthorpe for cash consideration of US$240 million. POSCO will be provided with a long-term offtake agreement for 7500 t of nickel in mixed nickel-cobalt hydroxide precipitate (MHP) per year produced at Ravensthorpe, beginning in 2024. The balance of Ravensthorpe’s production will continue to be marketed by First Quantum. The transaction is subject to certain conditions including approval by the Australian Foreign Investment Review Board (FIRB). The transaction is expected to close sometime in 3Q21. The proceeds of the transaction will be applied to the outstanding amount on the company’s revolving credit facility, continuing the company’s debt reduction.
As part of the transaction, First Quantum and POSCO have also entered into a Memorandum of Understanding (MOU) to explore a partnership to produce battery cathode precursor materials, likely in the form of nickel sulphate, by utilising the MHP from Ravensthorpe. First Quantum and POSCO will work together over the coming months to advance this potential partnership.
“We are pleased to welcome POSCO as our new long-term strategic partner in Ravensthorpe,” Philip Pascall, Chairman and CEO said. “Our respective organisations have complementary skillsets which will allow us to maximise the strategic value of Ravensthorpe as a key long-term supplier of nickel to the EV battery sector. We look forward to working closely with POSCO at Ravensthorpe and exploring options to broaden our relationship.”
Read the article online at: https://www.globalminingreview.com/mining/21052021/first-quantum-announces-sale-of-ravensthorpe-nickel-stake/