Leigh Creek finds offtake partner in Korean construction company
PERTH (miningweekly.com) – ASX-listed Leigh Creek Energy has inked a urea offtake heads of agreement (HoA) with South Korean construction major Daelim.
The HoA covers a minimum of 500 000 t of granular urea a year, for a minimum period of five years, accounting for all of Leigh Creek’s export urea from its Leigh Creek project, in South Australia.
“Its no coincidence that immediately following travel borders being opened up that we were able to travel to Korea and hold very positive meetings with Daelim,” said Leigh Creek executive chairperson Justyn Peters.
“This HoA is important to our company as it sets out a clear process that mirrors the process used to sign the engineering, procurement and construction contract with Daelim. The HoA, with an exclusivity period, allows both parties to put in the time, energy and cost to come to a definitive agreement without the risk of, to be frank, Daelim being gazumped by another party. After meetings with Daelim, Leigh Creek was sufficiently confident to grant an exclusive period.”
Peters said that if signed, this would be the first and last offtake agreement that would be needed in order to secure funding for the Leigh Creek project, however, it would not exclude the company from securing other offtake agreements, and Leigh Creek was still in discussions with other parties.
A 2020 prefeasibility study into the Leight Creek project estimated that it would require a capital investment of A$2.6-billion, to support an annual plant capacity of one-million tonnes a year, with scope to increase urea production capacity to two-million tonnes a year. The project is expected to have a commercial life of some 30 years.
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