On May 19, First Quantum announced the sale of a 30 per cent stake in its Ravensthorpe nickel mine in Western Australia to South Korean steelmaker Posco for $240m.
First Quantum, with a 70 per cent stake, continues to operate the mine.
Proceeds from the deal are used to reduce the company's debt.
In addition to the transaction, the two parties have entered into a strategic partnership to use Ravensthorpe's MHP to produce nickel sulfate, the raw material for ternary precursors.
Posco has secured a long-term purchase agreement for 7,500 tonnes of MHP produced by Ravensthorpe per year to be supplied to Posco starting in 2024, with the remainder to be sold by First Quantum.
The deal is subject to certain conditions, including approval from Australia's Foreign Investment Review Board.
The transaction is expected to close in the third quarter of 2021.
Posco, the largest steelmaker in South Korea and the fourth-largest in the world, is a leading integrated producer of positive and negative electrode materials for the electric vehicle battery industry and is expanding its battery materials business, some of which will be supplied by Ravensthorpe.
According to Mysteel research, MHP production in the first quarter of 2021 was 4,642 tons, down 23% from the fourth quarter of 2020.
MHP production guidance for 2021 is 23,000 to 27,000 tons.
