The Lake Wells project is positioned as the low CO2 emitting SOP project development in Australia
The loan is provided for the construction and ramp up of the Lake Wells project.(Credit: Henrique Lopes from FreeImages)
Australian Potash announced that the Northern Australia Infrastructure Facility (NAIF) has granted an AUD140m ($109m) loan to support the development of the Lake Wells sulphate of potash (SOP) project in Western Australia.
The loan is provided for the construction and ramp up of the Lake Wells project.
The Lake Wells project, which is located near Laverton, is positioned as the low CO2 emitting SOP project development in Australia, with a high-penetration hybrid renewable power solution.
According to the company, the NAIF facility is the first significant step in the financing route for the development of Lake Wells and is one tranche of a multi-tranche debt facility.
The Lake Wells SOP project is expected to provide substantial economic and social benefits to the regions, including Northern Australia and the remote Shire of Laverton.
Australian Potash managing director and CEO Matt Shackleton said: “We are very pleased to advise the first major step in financing the development of Lake Wells, with the board of NAIF resolving to support this regionally important project that returns strong social and economic benefits.
“Approximately 30% by value of the construction EPC contracts will be awarded to companies in Northern Australia, and 20% by value to Indigenous companies and joint ventures.
“We continue to enjoy strong relationships with stakeholders in the local community of Laverton, most importantly with senior traditional owners.”
Export Finance Australia is also advancing its due diligence and credit evaluation to potentially offer a tranche of the senior debt facility for the project.
Last month, Australian Potash received full environmental approval for the AUD208m ($158.5m) Lake Wells sulphate of potash project from the Western Australian government.
In November last year, the company signed a binding 10-year take-or-pay term sheet with German chemicals marketing enterprise HELM for 20,000 tonnes per annum (tpa) of K-Brite sulphate of potash from the Lake Wells project for distribution into the US.