Finnish metal manufacturing company Terrafame has announced that it will establish a battery chemicals plant in Terrafame’s industrial site in Sotkamo, Finland.
The company intends to complete the construction of the plant by the end of 2020 and commence commercial production at the start of 2021.
The company plans to process Terrafame’s current main product nickel-cobalt sulphide into nickel sulphate and cobalt sulphate, which are used in the manufacturing of lithium-ion batteries.
The plant has an annual production capacity of 170,000 tons of nickel sulphate and 7,400 tons of cobalt sulphate.
The total investment in the battery chemicals plant is around €240m. In November 2017, Terrafame, Finnish Minerals Group (previously Terrafame Group), Galena Asset Management, Trafigura Group and Sampo agreed on a $200m funding package for the plant project.
They have agreed on an additional funding package of approximately €100m related to the construction of the battery chemicals plant.
Trafigura has agreed to provide €42m ($50m) loan facility, and Galena Fund and Finnish Minerals Group have made equity investment commitment of €30m each.
This will be carried out by allocating a €30m to the plant project out of the still unutilized €50m investment commitment made by Finnish Minerals Group in February 2017 to Terrafame.
The battery chemicals plant will produce nickel sulphate for approximately million electric vehicle batteries and cobalt sulphate for approximately 300,000 electric vehicle batteries each year.
Equity investments will be made at the same price per Terrafame’s share as in previous financing arrangements.
The equity investment commitment will give Galena option rights to subscribe to Terrafame’s shares worth €17m, and the subscription price will carry a premium of 15% above the current subscription price.
Also, Trafigura and Terrafame have extended the current zinc sulphide agreement by five years.
In February 2017, Finnish Minerals Group made a €50m investment commitment as part of the previous funding package and its share of the now agreed funding will be carried out by allocating €30m of the existing investment commitment to the plant project.
Finnish Minerals Group owns 77.0%, Galena 22.7% and Sampo 0.3% of Terrafame. After the equity investments, Finnish Minerals Group’s shareholding will decrease to 69.2% and Galena’s shareholding to 30.6%.