$300m puts Salt Lake Potash in pole position to become Australia’s first commercial sulphate of potash producer

Salt Lake Potash has raised nearly $300 million to develop its Lake Way sulphate of potash project 15km south of Wiluna, including $65.5m from the Federal Government’s Clean Energy Finance Corporation. The Tony Swiericzuk-led company announced this morning it had locked in $US138m ($192m) in debt funding from Taurus Funds Management, which is in a syndicate with the CEFC, and would raise a further $98.5m in a placement priced at a discounted 50¢ a share. The company said the cash injection would complete funding requirements to develop the 245,000 tonne-a-year project, with first production expected in the first quarter of next year. If successful, the timeline would make Salt Lake the first commercial producer of sulphate of potash in Australia. Salt Lake secured the CEFC funding after winning green label certification for Lake Way, which showed the project would be a low-emissions producer of SOP. CEFC chief executive Ian Learmonth said low emissions SOP production was an exciting new Australian industry with the potential to substantially reduce greenhouse gas emissions associated with the hard-to-abate agricultural sector. “Using sustainably produced SOP means we can continue to decarbonise agriculture while meeting the growing demand for food,” he said. “At the same time, we are supporting the development of a new export industry for WA, providing another great example of the economic benefits of transitioning to lower emissions.” The latest National Greenhouse Gas Inventory for the December quarter of 2019 found agriculture accounted for 12.9 per cent of Australian emissions, with about 4 per cent of agricultural emissions from fertiliser use. Salt Lake will use a 5MW solar farm and a 2MW battery as part of its production plant, which will extract hypersaline brine from beneath the lake’s surface, concentrate it into potassium-rich salts via a series of evaporation ponds and convert it into sulphate of potash. Federal Energy and Emissions Reduction Minister Angus Taylor said the project would create about 430 jobs during the construction phase and more than 100 full-time operational roles. Lake Way is expected to generate EBITDA of $111m and average annual after-tax free cash flow of $78m. Salt Lake has plans to develop other potash projects in the Goldfields and become a multi-lake producer of the high-value fertiliser. Shares in the Ian Middlemas-chaired and backed company last changed hands for 61¢.

$300m puts Salt Lake Potash in pole position to become Australia’s first commercial sulphate of potash producer

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