Hexagon's ammonia study proves up
PERTH (miningweekly.com) - A prefeasibility study (PFS) for the WAH2 low-emissions ammonia project, in Western Australia, has demonstrated the project’s technical and financial feasibility, said ASX-listed Hexagon Energy Materials on Monday.
The PFS estimates that Phase 1 of the project can support a 600 000 t/y production capacity, doubling to 1.2-million tonnes a year once Phase 2 is operational.
The Phase 1 project has a net present value of A$248-million at an ammonia price of $552/t. At an ammonia price of $552/t, the combined Phase1 and Phase 2 development is expected to deliver a net present value of A$486-million at an internal rate of return of 10.5%.
“The positive outcome of the WAH2 PFS shows a significant opportunity to be a low-cost operation with an attractive net present value and internal rate of return. This is another step in the path to bring the WAH2 project to fruition,” said Hexagon chairperson Charles Whitfield.
“This follows the grant of land for the project by Development WA last month. We intend to move immediately to progress the front-end engineering design (FEED), offtake, financing and approvals workstream and the company hopes to be able to announce progress with strategic tie-ups in the near future.”
Hexagon is planning to execute its project financing plan in parallel to the planned technical and commercial pre-FEED workstreams, with the company expecting financing to be facilitated by long-term take-or-pay ammonia offtake contracts, gas supply and carbon dioxide sequestration contracts and equity participation by strategic partners.
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