TNG Ltd has appointed Germany’s KfW IPEX-Bank to lead a syndicate that will raise USD$600m to underpin development of its Mount Peake vanadium-titanium-iron project in the Northern Territory. The final capital requirements will be determined and optimised during the ongoing front end engineering and design study and lender’s due diligence.
TNG Ltd has been checking off milestones for its Mount Peake vanadium-titanium-iron project in the Northern Territory with abandon and has now appointed Germany’s KfW IPEX-Bank to lead a USD$600m debt raising to underpin the project’s development.
KfW IPEX-Bank has a proven track record for complex project financings worldwide and will structure, coordinate, lead, arrange and manage a syndicate to raise the funds.
The final capital requirements will be determined and optimised during the ongoing Mount Peake front end engineering and design, or “FEED”, study and lender’s due diligence.
KfW IPEX-Bank will also advise TNG on how to maximise cover instruments available from export credit agencies.
TNG Managing Director Paul Burton said: “KfW IPEX-Bank is one of the leading export and project financing banks worldwide, with a proven track record for complex project financings spanning many decades and in-depth expertise to access and optimize ECA cover and the respective funding.”
“We now look forward to working closely with KfW IPEX-Bank to progress the full financing package for the Mount Peake Project expeditiously, with a view to achieving financial close as soon as possible and getting on with the job of constructing this major new Australian resource project.”
Mount Peake has an ore reserve of 41.1 million tonnes grading 0.42% vanadium pentoxide, 7.99% titanium dioxide and 28% iron.
It is forecast to produce 243,000 tonnes of high-purity vanadium pentoxide, 3.5 million tonnes of titanium pigment and 10.6 million tonnes of high-grade iron oxide during its initial 17-year mine life, according to economic studies undertaken for TNG.
German metallurgical engineering company SMS Group is undertaking the FEED work, which includes all process plant equipment including the mine site concentrator, TIVAN downstream processing plant, titanium pigment plant and associated equipment.
TNG’s proprietary TIVAN process is a method for treating ore without the need for expensive, energy-intensive roasting to produce a titanium feedstock with low iron content.
The process can also potentially minimise the environmental impact compared to a standard sulphate titanium pigment production process.
SMS will also provide a binding fixed-priced turn-key engineering, procurement and construction proposal for the concentrator and processing plant.
This will include production quantity, production rate and product quality guarantees that will significantly de-risk the project for TNG.
Other milestones that have been ticked off include securing both the mineral leases and access permits for the project and offtake agreements for most of the products generated at the Mount Peake project.
Having KfW IPEX-Bank in its corner to lead the debt raising is a clear positive for TNG.
This process could receive support from the strong market demand for vanadium with current prices sitting over AUD$80,000 per tonne for high grade premium vanadium pentoxide flake.
While traditionally used by Chinese steel manufacturers to make their rebar products, it is the potential use in vanadium redox flow batteries that could accelerate future demand for vanadium.
This is increasingly being seen as better suited for large scale energy storage compared to lithium-ion batteries and it is not hard to envision a future where vanadium redox flow batteries are used as a community energy storage facility for new housing developments and subdivisions, to ensure uninterrupted power supply to consumers.