Renascor secures $185 million government loan to fast track graphite production

Renascor Resources (ASX:RNU) has received approval from the Australian government-backed Export Finance Australia (EFA) for a $185 million loan facility to fast track construction of the Siviour Graphite Project in South Australia. 

The facility comprises a $150 million term facility and a $35 million cost overrun facility to support any unforeseen increase in capital during construction.

The funding comes from the Australian government’s $4 billion Critical Minerals Facility — which the EFA manages — designed to grow the nation’s critical minerals sector, expand downstream processing, and help meet future global demand. 

Renascor, which has a market capitalisation of $210.77 million, aims to become a “globally significant” and diversified source of refined graphite products for sale into the electric vehicle battery supply chain.

The Siviour project is part of a planned integrated battery anode material manufacturing operation that will include a downstream processing facility in Port Adelaide targeting the production of purified spherical graphite (PSG). 

The company’s share price spiked 23.49% to $0.102 as of 1pm AEST today (17 April 2024). 

In preparation for the design, procurement, and construction of Siviour, Renascor is progressing advanced engineering designs for the mineral processing plant and non-process infrastructure. 

Discussions are also underway on potential binding offtake terms with existing non-binding offtake partners, alongside other battery-anode market participants. 

Managing Director David Christensen says the development strategy provides the company with an “early-mover” advantage by entering the market with a reliable supply of natural graphite concentrate. 

“The strategy allows us to generate early cashflows, accelerate production of graphite concentrates, continue to build valuable offtake relationships with leading anode suppliers, operate and optimise the PSG pilot plant and PSG product qualification, and de-risk the subsequent development of the downstream PSG processing facility,” Christensen says.

In a media statement released today (17 April 2024), Prime Minister Anthony Albanese says these “critical mineral projects will help secure good and secure jobs in manufacturing, and clean, reliable energy.”

EFA has been progressing due diligence of the upstream graphite concentrate operation, with aspects already completed including technical and no fatal flaws identified. 

Drawdown of the facility will be subject to several conditions, including completing all due diligence to EFA’s satisfaction. 

The federal government says Siviour will deliver significant economic benefits to South Australia, bringing in around 150 construction jobs during stage one, and 125 jobs once operational. 

Stage two of the project is expecting to deliver a further 225 construction jobs and more than 120 jobs once it is operational. 

The government is also providing Alpha HPA (ASX:A4N) $400 million in new loans to deliver Australia’s first high-purity alumina processing facility in Queensland. 

EFA is Australia’s export credit agency and provides commercial finance for export trade and overseas infrastructure development. 

Renascor Resources is a graphite-focused company that is working to power clean energy and green battery anode material. 

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Images: Renascor 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.