More support for BCI's $1.2bn project

The federal government will provide half the funding for a salt and potash project to be developed by Kerry Stokes-backed BCI Minerals, after committing an extra $150 million.

The government loans are part of a $740 million financing package announced by the ASX-listed company this morning.

It includes a $490 million loan from the Northern Australia Infrastructure Facility – a $40 million increase on NAIF's previous commitment to the Mardie project – and a $110 million loan from Export Finance Australia, which are intended to support the project's expanded scope.

The package also includes $140 million in loans from two commercial banks and covers nearly two thirds of the construction cost for Mardie, being $1.2 billion.

The balance will be equity funded.

BCI, which is one of a handful of sulphate of potash (SOP) hopefuls in Western Australia, is proposing a 60-year operation near Karratha targeting production of 5.35 million tonnes of salt and 140,000t of SOP (for use in fertiliser) each year.

That’s up from its previous targets of 4.4mtpa and 120,000tpa.

The Mardie project, which was recently recommended for approval by the state’s Environmental Protection Authority, is pending a final investment decision from the BCI board.

Managing director Alwyn Vorster said the company was well positioned to secure the remaining funds needed for construction.

“The participation of government funders such as NAIF and EFA, together with the confidence demonstrated by the lead commercial banks in the technical, economic and green credentials of the project is a strong validation of Mardie’s potential,” he told the market.

Northern Australia Minister David Littleproud said Mardie was the first new major salt project being developed in Australia in almost two decades.

“The means the Australian government is helping to secure a vital source of chemical and fertiliser supply for agriculture both at home and overseas,” he said.

“In addition to that, it will create hundreds of good quality jobs during construction and operations, which will benefit nearby communities like Karratha, Dampier and Onslow.”

The Mardie project is also one of three SOP developments to have received NAIF support, with the others being Australian Potash’s Lake Wells project in the Goldfields-Esperance region and Kalium Lakes’ Beyondie development in the Pilbara.

BCI’s shares were trading 12 per cent higher at 1:10pm AEDT on Friday to 46 cents.