Minbos Cabinda Phosphate Fetilizer Project

Minbos progresses multi-million-dollar funding facility for Cabinda

Minbos Resources (ASX:MNB) is working to satisfy its multi-million-dollar loan facility conditions and unlock funding to begin construction at its Cabinda Phosphate Fertiliser Project in Angola. 

In April, the credit committee approved a $21.5 million debt facility from the Industrial Development Corporation of South Africa (IDC), which will cover the majority of the US$24 million ($37.1 million) construction costs. 

The Angolan Sovereign Fund (FSDEA) engaged with Minbos, which has a market capitalisation of $43 million, on an equity injection of US$10-15 million. 

The FSDEA aims to take a strategic stake in Minbos to demonstrate the support the project has within Angola, and is currently completing site visits and due diligence. 

In conjunction, Minbos is engaging with an emerging market fund as an alternative or co-investor. The fund has already completed its first investment committee hurdle. 

Both funds are expected to put proposals to the investment committees by mid-July. 

Meanwhile, the IDC, which signed a term sheet with Minbos for a US$14 million loan facility, adjusted its condition for Minbos to obtain a US$10 million working capital facility. 

Instead, the IDC requires Minbos to obtain a term loan for US$10 million. 

To meet this condition, Minbos approached several banks in Angola and as a result, is advancing the loan application process with one of Angola’s largest banks, Banco BAI. 

The terms of the loan are defined by the Central Bank of Angola’s regulations to incentivise development of the agricultural sector, referred to as ‘Aviso No. 10’.

As such, the company seeks a five-year term loan with interest at 7.5% and a further 2% for guarantees from the Angolan Credit Guarantee Fund (FGC) for the loan’s security. 

In June 2024, BAI visited the Cabinda mine and fertiliser production sites, inspecting all imported equipment as part of due diligence activities. FGC also visited the Cabinda sites early last month. 

Minbos expects Banco BAI will be in a position for its credit committee to make an approval decision on the loan, subject to security and other conditions. 

Once all conditions are satisfied, Minbos will be fully funded to begin and complete construction, and will have working capital to deliver on its sales contract with major customer Grupo Carrinho. 

The company is also contemplating the immediate expansion of the plant and will update the market in due course. 

On 1 July 2024, Minbos signed a memorandum of understanding (MoU) with privately held Foskor, which owns and operates a phosphoric acid-based fertiliser plant in South Africa, to test the company’s phosphate rock for commercial suitability. 

Foskor is finalising the MoU to investigate potential export from Porto de Caio to South Africa. Porto de Caio has confirmed it is on track to make a berth available in December 2025. 

Minbos Resources is a fertiliser-focused company building a nutrient supply and distribution business that stimulates agricultural production and promotes food security in Angola and the broader Congo Basin. 

Write to Aaliyah Rogan at Mining.com.au   

Images: Minbos Resources
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Written By Aaliyah Rogan
Relocated from the East Coast in New Zealand to Queensland Australia, Aaliyah is a fervent journalist who has a passion for storytelling. When Aaliyah isn’t writing stories, she is either spending time with friends and family or down at the beach.