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AUS$740 million project debt funding secured for Mardie SOP project

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World Fertilizer,

BCI Minerals has received approvals, subject to conditions, for AUS$740 million of project finance debt for the Mardie sulfate of potash (SOP) project.

Total funding of approximately AUS$1.2 billion is required to develop the project to a capacity of 5.35 million tpy of salt and 140 000 tpy of SOP. This includes all construction, contingency, funding, interest, and ramp-up costs and will be funded by the AUS$740 million debt package and approximately AUS$460 million in equity from a combination of existing BCI cash, ongoing Iron Valley royalty earnings, potential corporate debt and new equity.

The project finance package includes:

  • AUS$490 million, 15-year facility from the Northern Australia Infrastructure Facility (NAIF);
  • AUS$110 million, 10-year facility from Export Finance Australia (EFA);
  • Two commercial banks (Australian and international) have provided credit approvals for AUS$310 million commitments to the Green Commercial Facilities for the project which include a AUS$140 million 7.5 year construction facility, AUS$120 million cost overrun facility and a AUS$50 million bank guarantee facility for any performance bonds required under construction or operating contracts; and

The Green Commercial Loan Facilities will align with the Asia Pacific Loan Markets Associations’ and Loan Market Association’s Green Loan Principles. More than 99% of the energy required to produce salt and SOP at Mardie is derived from natural solar and wind sources, with seawater the inexhaustible feedstock. Meeting the criteria for pollution prevention, materials recovery, materials re-use and the production of agricultural fertilizer from salt waste through sustainable means were key to establishing Green Loan eligibility.

Total funds will be committed over an approximate 5-year period to complete construction of the project assets, commence operations and progress ramp-up of production and sales. BCI equity contributions will be spent first, followed by the NAIF facility drawn to 50% and thereafter, the bank facility, EFA facility and remaining balance of the NAIF facility will be drawn on a pro-rata basis.

NAIF CEO, Chris Wade, said: “We are delighted to be able to increase our support to the Mardie Salt & Potash Project which continues NAIF’s record of investing for positive economic impact in northern Australia.” BCI’s Managing Director, Alwyn Vorster said: “Securing this landmark $740M project finance debt package represents a key milestone for the Mardie Salt & Potash Project and will underpin the pending consideration of the BCI Board to progress Mardie to a final investment decision (FID). 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. BCI is now well positioned to achieve FID, raise the required new equity and subject to final approvals, commence main construction.”

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