Posco Pilbara Lithium Solution Co Ltd has signed a 600 billion won (US$460 million) loan to fund the balance of the capital development and commissioning costs for its new 43,000 tonnes per annum (tpa) lithium hydroxide monohydrate chemical facility being constructed in South Korea.
The loan agreement has been executed with The Korea Development Bank and The Export-Import Bank of Korea. The debt facility represents the remaining 60% of the forecast funding required for the development of the chemical facility, with joint-venture parties having previously funded their equity share.
The debt facility, which has a seven-year term and repayments commencing two years from drawdown, comprises both a fixed and variable interest rate with tranche A (50% of the loan amount) fixed and tranche B (the remaining amount) variable.
The facility does not restrict the payment of dividends or other distributions from Posco Pilbara JV Company to its shareholders, subject to compliance with financial covenants and no events of default existing at the time.
Australian Stock Exchange-listed Pilbara Minerals has an 18% interest in Posco Pilbara JV, with an option for Pilbara to increase it to 30%. The debt facility is non-recourse to Pilbara Minerals, with the security provided by Posco Pilbara JV and limited to the land, building, plant, and equipment of the chemical facility.
Construction of the facility started last year, and has already made significant progress. Commissioning of the first 21,500 tpa train is scheduled to commence from late 2023, and the second 21,500 tpa train from the March 2024 quarter.
Pilbara Minerals will be the sole supplier of spodumene concentrate (up to 315,000 tpa) to the new facility.
“We are delighted that the joint venture has secured this debt funding from leading Korean banks on commercially favourable terms," says Pilbara Minerals managing director and chief executive officer Dale Henderson.