First Quantum sheds 30% of nickel operation for $240M to reduce debt
(Kitco News) - First Quantum Minerals (TSX:FM), a leading copper producer, today announced that it has entered into a binding agreement to sell a 30% equity interest in the Ravensthorpe nickel operation in Western Australia for cash consideration of $240 million to POSCO, one of the world’s largest steel producers.
First Quantum said it will retain a 70% interest in Ravensthorpe and continue to be the operator. The proceeds of the transaction will be used to reduce the company’s debt. In addition to the transaction, POSCO and First Quantum have also agreed to evaluate a strategic partnership to produce battery precursor materials from production at Ravensthorpe.
The company added that POSCO will be provided with a long-term offtake agreement for 7,500 tonnes of nickel in mixed nickel-cobalt hydroxide precipitate (MHP) per year produced at Ravensthorpe, beginning in 2024. The balance of Ravensthorpe’s production will continue to be marketed by First Quantum.
Ravensthorpe is a large-scale, open pit nickel and cobalt operation located in Western Australia, 150km west of Esperance. Ravensthorpe produces a high quality MHP which is a sought-after feedstock for the production of EV battery cathode materials.
Following a successful restart of operations in the first quarter of 2020, the mine is now transitioning to the Shoemaker Levy deposit which will provide stable feed to the plant for the next twenty years. Completion of construction and commissioning works at Shoemaker Levy, including a 10km conveyor, is expected this quarter.