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.