On May 19, First Quantum announced it had entered into a binding agreement to sell a 30% equity interest in Ravensthorpe Nickel Operation ("RNO") to POSCO for a cash consideration of USD$240 million.
The transaction includes a long-term offtake agreement for 7,500 tonnes of nickel in mixed nickel-cobalt hydroxide precipitate (“MHP”) per year produced at RNO, beginning in 2024. As part of the transaction, First Quantum and POSCO have also entered into a Memorandum of Understanding to explore a partnership to produce battery cathode precursor materials utilising the MHP from RNO.
Located 150km west of Esperance in Western Australia, Ravensthorpe produces a high quality mixed nickel-cobalt hydroxide precipitate which is a sought-after feedstock for the production of EV battery cathode materials. The operation is positioned as a clean, sustainable source of nickel for the EV battery value chain with industry leading ESG credentials and a small carbon emissions footprint.
First Quantum is a global copper company, that operates long life mines in several countries and employs approximately 20,000 people world-wide. The company has significant nickel resources which complement its world-class copper operations, underpinned by Ravensthorpe and the Enterprise Nickel Project in Zambia.
POSCO, South Korea’s largest steel producer, is also a leading integrated producer of cathode and anode materials for the electric vehicle battery market.
The transaction is subject to certain conditions including approval by the Australian Foreign Investment Review Board (“FIRB”), and is expected to close in the third quarter of 2021.
MinterEllison advised on all Australian legal aspects of the deal, working closely with outside counsel in Canada, South Korea and United Kingdom.
MinterEllison Partner Adam Handley said:
"We are pleased to have the opportunity to advise FQM on this significant transaction. This was a complex and multi-dimensional deal, that involved seamlessly bringing together the best of our firm across Energy & Resources, Tax, Corporate Finance and International Markets to deliver a positive outcome for our client. Having advised FQM on the original purchase of RNO from BHP Billiton more than 10 years ago, I'm delighted to again support FQM to achieve its objectives with this important transaction."
The multi-disciplinary deal team was led by Partners Adam Handley and Bryn Davis, with support from Simon Scott (Partner), Jordon Philips (Partner), Gemey Visscher (Partner), Elissa Romanin (Partner), Nick Sceales (Special Counsel), Anthony Di Biase (Special Counsel), Tighe Whelan (Special Counsel), Kayla Giudicatti (Associate) and Dylan Hoyne (Lawyer).
