Avenira (ASX:AEV) has secured a strategic equity investment of $2 million from Sichuan Hebang Biotechnology Corporation (SHSE:603077).
In tandem, Avenira and Hebang have entered into a non-binding strategic cooperation and offtake memorandum of understanding (MoU) that establishes a framework to work together in the fields of phosphate mining and yellow phosphorus production.
Both parties have entered into a binding subscription agreement for Hebang to invest the $2 million in Avenira via a private placement. The placement follows Hebang completing its site inspection and evaluation into Wonarah and its underlying mineral geology with a view of developing a yellow phosphorus plant in Australia, using the phosphate from Wonarah as a feed source.
On completion of the placement, Hebang will become a substantial shareholder in Avenira.
The MoU establishes a framework for close cooperation between Avenira and Hebang in the fields of phosphate mining and yellow phosphorus production. Yellow phosphorus is a vital intermediate product in the production of thermal phosphoric acid (TPA), a core feedstock in the manufacture of LFP Cathode Active Material (LFP).
The MoU provides the framework for further negotiations in relation to price, term, product quality and other offtake parameters.
Hebang is a public company listed on Shanghai Stock Exchange, which focuses on the manufacture of chemicals and photovoltaic products, including feed nutrients , herbicides, photovoltaic module, and other photovoltaic materials.
It is also one of the world’s largest producers of PMIDA (N-phosphonomethyl iminodiacetic acid) and glyphosate, that allows farmers to reduce weed competition and increase yields in food crops to feed the worlds growing populations, both of which use phosphate as its key ingredient.
Hebang is also a major manufacturer of solar panels and has the necessary technology and processes required for a photovoltaic power station, yellow phosphorus factory construction, and as a yellow phosphorus user, has a procurement demand for yellow phosphorus products. It has more than 6,700 employees and generated over US$1.7 billion in revenues in FY2022.
Write to Adam Orlando at Mining.com.au