The project also includes two processing facilities in South Australia – one at the mine site to create a 95 per cent graphite product while a second, more technical site would create a purified spherical graphite product to a purity of at least 99.95 per cent.
The site for the second processing plant is expected to be announced soon with Port Augusta, Port Pirie and Port Adelaide short-listed.
If it goes ahead, the project is expected to create about 100 construction jobs and 200 further positions once production begins.
Renascor managing director David Christensen said the government loan was “a major de-risking event” and would likely fast track the project as it is “the third pillar of three things we need to do to get us over the line”.
He said the final investment decision would likely happen this year with construction to start next year and production to begin in 2024.
“We need to do all of our technical work, we need all of our regulatory approvals but the trick to most graphite projects has been bringing in a financial package that can make it viable, which is really hard in a commodity that doesn’t trade as freely as copper and gold,” Christensen told .
“Financing and offtake really go hand in hand and now that we have a clear path towards financing, that satisfies a large portion of that pillar to get us to final investment decision and it will accelerate everything else.”
Adelaide-based Renascor is aiming to become a supplier of purified spherical graphite to the global electric car industry, striking a non-binding deal with major Korean lithium-ion battery materials purchaser POSCO in August.
The Siviour Project was then given major project status by the federal government in September.
The announcements were among a number of positive moves for the listed company in 2021, which helped propel its share price from just $0.01 in January last year to $0.17 at the end of the year.
Its price has jumped further in recent weeks and added another 20 per cent following yesterday’s announcement to close at $0.29 with a market capitalisation of $549 million.
Christensen said the original cost estimate of $205 million wxjmtzywas based on 2019 figures and would be revisited in the coming months to update the costings and take into account some of the supply chain logistic issues that are impacting procurement and labour costs.
“We’ll look at those numbers again and we’re also optimising some of the technical work and that may alter it so that $205 (million) may flex … there may be a delta of $20-odd million or more,” he said.
However, he said there were a few options to bridge the shortfall between the $185 million government loan and the overall project cost including additional equity.
“We are in discussions right now with one of our offtake partners POSCO about making an equity injection and that kind of model where an offtake partner takes an equity chunk is usually beneficial because it will allow us to meet a large portion of our capital needs and it gives them more surety of supply.
