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Thursday, May 20, 2021 - 14:09:49
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Mining News Pro - First Quantum Minerals on Wednesday said it agreed to sell a 30% stake in its Ravensthorpe nickel mine in Western Australia to South Korean steelmaker POSCO for $240 million.
The miner will remain as operator of the mine and retain a 70% interest.
“First Quantum expects to use the proceeds to reduce the outstanding balance on its revolving credit facility as it continues to focus on debt reduction,” the company said in a press release.
The companies have agreed to evaluate a strategic partnership to produce battery precursor materials from production at the mine.
Under the deal, POSCO will receive a long-term offtake agreement for 7,500 tonnes of nickel in mixed nickel-cobalt hydroxide precipitate per year produced at Ravensthorpe, beginning in 2024.
“Today’s transaction could be an example for future strategic investments in the sector,” said BMO Capital Markets in a note.
“As the ‘green’ economy gains strength, supplies of critical raw materials could become scarce – especially those supplies which are traceable to sustainable and ethical mining practices”
Ravensthorpe is a large-scale, open pit nickel and cobalt operation located in Western Australia.
Nickel production last year was 12,695 tonnes.
Midday Wednesday, First Quantum’s stock was down 7% on the TSE. The company has a C$19.5 billion market capitalization.
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