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Stokes-backed BCI will raise $ 1 billion in salt projects without full green approval

At that time, BCI took three years to get environmental approval for the original small design.

The company promoted large projects for the rest of 2021 while advancing small project approvals.

Wrox by Pty Ltd, a private company of influential media mogul Kerry Stokes, owns 40% of BCI minerals. There is no suggestion that Mr. Stokes was involved in promoting the project.

In mid-October, $ 740 million in debt was secured and $ 600 million was raised by the Australian Government. Infrastructure facilities in Northern Australia financed $ 490 million, with $ 110 million from Australian export finance.

A week later, the board of directors of BCI, who owns the project, made the final investment decision and began issuing shares to raise $ 360 million in November.

The 57-slide presentation to facilitate equity issuance mostly mentions the disconnect between larger and more profitable projects explained to investors and smaller projects submitted to WA’s Environmental Protection Agency. It wasn’t done.

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Two small footnotes state that the approval is based on a “decisive feasibility study,” which is a previous small design and project revenue described in the rest of the slide pack. It does not say that it does not reflect.

In the two paragraphs on environmental risks in the appendix of Slide 50, it is stated that a significant delay or refusal to approve a larger footprint “may adversely affect the implementation of the Murdy project and the withdrawal of debt.” ..

On November 25, BCI informed the market that Western Australia’s Minister of the Environment, Amber-Jade Sanderson, had approved the implementation of the Murdy Project. This release points to the risks associated with approval in a wider area than “listed” in the November slide pack.

That day, BCI’s stock surged 15%, adding $ 41 million to the company’s value.

Alwyn Vorster, CEO of BCI Minerals, said he is confident that the material presented to investors has been fully emphasized by BCI and that the approval process for a larger footprint has not begun.

“I made it very clear,” he said. “I’m sure this project will work in 4.4. [million tonnes a year concept] It’s just better and more attractive [at 5.3 million tonnes]..

“If there is a significant risk in the next 6 months, we will convert the pond 9 to a crystallizer and proceed with the project a little smaller before reaching the pond 9.”

But for investors, the difference between a project that BCI has obtained environmental approval from a project that the company is mainly talking about is important.

According to BCI Minerals, which was released to the market in April 2021 when a large project was announced, a small approved project will generate 24% or $ 119 million less annual revenue.

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Importantly, the net present value of approved projects before tax is $ 473 million less than the larger concept, which is a big difference for companies with a market capitalization of $ 276 million.

Vorster said he is confident that a larger footprint will be approved, although the company has no guarantees. Many are covered with mesquite trees, which have been declared pests in Western Australia, and have no additional impact on the waters that were the focus of all three appeals to the initial approval.

Investors returned BCI’s share price to pre-announced levels after another two days of trading.

An EPA spokeswoman advised that BCI intends to scale the project and said regulators had informed the company that changes could not be discussed until the first approval by the Environment Minister was signed. ..

There is no extended Mardie 45C shortcut

Vorster said Mardie’s expanded footprint does not use regulatory measures for minor changes under Section 45C of the Environmental Protection Act and has passed an “appropriate assessment” by the EPA that may include an opportunity for public submission. He said he was expecting to do.

“I personally believe that the days in Section 45C are very limited,” Vorster said.

“The resource sector has been on that path for a long time, and major changes were often approved through 45C.

“I believe the department is looking at it very carefully.

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November, Woodside approved Its $ 12 billion ($ 17 billion) scaborow-to-Pluto gas project, despite challenging the approval of important section 45C heard by the Supreme Court of Western Australia in late December.

The WA Conservation Council has begun to oppose the decision by the WA Environmental Protection Agency, with Pluto on the Woodside and LNG plants on the northwestern shelf from fields where the plants were originally built, as well as declining. I made it possible to process the gas of.

Approval is based on Section 45C of the Environmental Protection Act and permits changes to environmental conditions without an EPA review unless the change “in addition to the original proposal, may have a significant adverse effect on the environment”. To do.

CCWA claims that decades of additional production from LNG plants, which produce millions of tonnes of carbon emissions annually, will have a significant negative impact on the environment.

Vorster, who has led BCI for five years, said Mardie has strong environmental credibility because it uses large amounts of sun and wind directly to evaporate water and concentrate saline solution.

“We haven’t created deep holes or big obtrusive things in mining waste disposal sites,” he said.

Miners are also planning to combine wind and solar power with gas to reduce emissions from the project’s power plants.

Vorster said the Murdy project, like other projects in Western Australia, is feeling cost pressure, but cost estimates were completed in July recently, reflecting the current market. The bids received so far are below the cost estimate in total.

Stokes-backed BCI will raise $ 1 billion in salt projects without full green approval

Source link Stokes-backed BCI will raise $ 1 billion in salt projects without full green approval

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