PERTH (miningweekly.com) – Potash developer Highfield Resources has mandated a group of experienced European mining finance lenders for a €312.5-million senior secured project financing package to finance the construction of its Muga potash project, in Spain.
"We are delighted to reach this new milestone towards the construction of Muga. BNP Paribas, ING, Natixis and Societe Generale have extensive experience in providing project financing to mining projects and signing this €312.5-million mandate letter is no doubt a testament to the high-quality, strong economics and top environmental and social governance credentials of this project,” said Highfield CEO Ignacio Salazar.
“In addition, the strategic location of Muga in southern Europe, is being viewed more favourably than ever in the current geopolitical situation, making it an attractive candidate for financing from the international banking community.
“In the context of reviewing alternative financing options which are complementary to project finance, the strategic advantages of Muga are also providing increased impetus to the company’s engagement with potential strategic partners,” said Salazar.
An updated feasibility study into the Muga-Vipasca potash project estimated a capital cost to develop the project of €607-million. Over its 30-year mine life, the project is expected to produce 27.5-million tonnes of muriate of potash, with Phase 1 of the operation producing 500 000 t/y and phase 2 increasing production to one-million tonnes a year.