Sibanye-Stillwater has executed a €500-million green loan financing facility for its Keliber lithium project, in Finland, through its subsidiary Keliber Technology Oy.
The company explained that the green loan secures the final capital expenditure funding required for the construction and development of its lithium mining, processing and refining facilities in Kaustinen, Kronoby and Kokkola, Finland, respectively.
The green loan completes the full financing requirement for the Keliber lithium project, while also being a significant injection of capital for Sibanye to improve financial flexibility and liquidity.
It also helps to ensure available group cash and debt facilities are ring-fenced for operational and corporate requirements.
“The funding package provides cost-effective, long-term funding for the balance of the Keliber project’s funding needs and significantly improves group liquidity, effectively ring-fencing the existing group facilities for operational requirements.“[It also] confirms the viability and [environmental, social and governance] credentials of the Keliber lithium project, as well as underscoring its strategic importance to the European clean energy transition,” Sibanye CEO Neal Froneman said on August 22.
The green loan is a distinctive credit facility, comprising a bank-financed €250-million Export Credit Agency (ECA) guaranteed tranche, a €150-million tranche provided by the European Investment Bank (EIB) and a €100-million syndicated commercial bank tranche.
The green loan facilities are governed by a green financing framework and its green credentials have been confirmed by an independent second party, achieving a ‘medium green’ classification from S&P Global ratings.
The green financing framework has been prepared in alignment with the Loan Market Association’s 2023 green loan principles. The framework provides guidance on the use of proceeds, the process for evaluation and selection, the management of proceeds, and reporting.
The proceeds of the loan will be used to complete the development of the Keliber lithium project, with a total capital expenditure of about €656-million in 2023 terms, or about €667-million when adjusted for inflation, partially funded by a previously raised equity financing component of about €250-million.
Finnish State-owned ECA Finnvera has provided a guarantee covering 80% of the €250-million ECA tranche. This funding is aligned with Finnvera’s strategic aim of strengthening the operating potential and competitiveness of Finnish enterprises by providing loans, domestic guarantees, export credit guarantees, and other services associated with the financing of exports.
The EIB financing of €150-million is consistent with the EIB’s intent to accelerate the green transition in Europe, boost technological innovation and support regional development. This marks the first EIB financing support for mining critical raw materials in the EU and is part of the move towards the EU’s strategic autonomy.
Bank of America (BoA) and Natixis Corporate and Investment Banking acted as joint coordinators, bookrunners and mandated lead arrangers for the entire financing package. BoA acted as the green loan coordinator and documentation agent while Natixis acted as the facility agent, Finnvera and EIB coordinator.
Sibanye said the syndicated loan tranche was oversubscribed, with seven international commercial banks participating, which is in addition to the loan from EIB.
Aside from using the proceeds of the facilities to develop, build and maintain the Keliber lithium project, one of the key terms is for the amortised repayment profile to be tied to projected cash flows, with ultimate maturities of seven to eight years at a variable interest rate linked to the Euro Interbank Offered Rate.
The facility borrower is Keliber Technology Oy, and it will be guaranteed by Sibanye-Stillwater, Stillwater Mining Company, Sibanye Gold, Sibanye Rustenburg Platinum Mines, Kroondal Operations, Eastern Platinum, Western Platinum, Sibanye, Sandouville Refinery and Keliber Oy.
Keliber Technology Oy and Keliber Oy will simultaneously join the guarantor group for Sibanye-Stillwater’s $1.2-billion bonds, $1-billion revolving credit facility, R6-billion revolving credit facility and the silicosis guarantee facility.
“The [Keliber lithium] project has already taken determined steps forward with the construction of the refinery and mining sites. Today, we see the Keliber lithium project as an integral part of the Finnish battery value chain and at the same time as the first integrated lithium project in Europe.
“The financing solution that has now been secured enables the construction phase to be completed and the production of battery-grade lithium hydroxide to begin.” Finnish Minerals group CEO Matti Hietanen said.