Neometals Ltd announced significant progress in financing the Vanadium Recovery Project (VRP1) being run by Recycling Industries Scandinavia AB (RISAB).
Specifically, RISAB’s ongoing debt financing engagement with the European Investment Bank (EIB) has passed the request for funding consideration stage. It is now in the EIB’s formal appraisal stage of diligence. RISAB is in talks with several debt sources and will decide on the debt finance package and participating lenders in due course.
Neometals owns 50% of RISAB, which is investigating the viability of developing a plant in Scandinavia to process and recover high-grade V2O5 from vanadium-bearing steel manufacturing by-product generated by SSAB EMEA AB and SSAB Europe Oy (collectively SSAB). Subject to successful project financing, a Final Investment Decision for VRP1 is scheduled for June 2023.
The EIB is the lending arm of the European Union and one of the main suppliers of climate funding due to its emphasis on climate action and environmental sustainability. Every year, the EIB makes direct loans to a variety of initiatives.
The EIB proposal assessment observed that the VRP1 would process steelmaking by-product that is now stockpiled. At the same time, the recycling nature of the project eliminated upstream mining costs or associated operating hazards. Crucially, the European Commission has designated vanadium as a “Critical Raw Material (CRM),” and the EIB notice released on the subject states, “The project supports a circular economy solution that will limit the use of primary resources for vanadium manufacturing.”
VRP1 has completed a critical stage of financing evaluation with the EIB. The lender’s technical assessment (LTA), prepared by independent third-party specialists, is still in this appraisal stage. The EIB’s approval of the LTA is the final component of due diligence before a binding term sheet for debt finance can be given.
“We first submitted our proposal to the EIB in October 2022, its acceptance validates our circular economy ambition to produce critical raw materials in Europe. Typically, cornerstone funding from the EIB for environmentally sustainable opportunities in the battery supply chain is on very attractive terms. There is keen interest from a number of debt providers for the funding of the Vanadium Recovery Project. We watch with interest the imminent release of the EU Critical Raw Materials Act today in Europe, particularly the expected financial support for strategic projects that produce critical raw materials, like vanadium, where the EU is 100% dependent on imports,” Neometals Managing Director Chris Reed said.
