Acron Group, Moscow, said this week that Russia’s state-owned development corporation VEB.RF’s Supervisory Board has approved a syndicated loan for the group’s Talitsky potash project under development in the Perm region of the country.
Under the financing plan now approved, VEB.RF and four Russian banks will provide a total of $1.45 billion of syndicated loan financing to Acron for up to 13 years. VEB.RF will provide $280 million, and the four banks, comprising Gazprombank, VTB Bank, Sberbank, and Otkritie Financial Corp. Bank, will provide a total of $1.17 billion. VEB.RF has also agreed a reserve tranche of $360 million.
The Russian fertilizer group in June reported that it had reached a preliminary agreement for a syndicated loan from Russian banks to fund the construction of the project (GM June 7, p. 27). The funds will be used to finance the completion of the vertical shafts and the development of the mine, as well as the construction of the processing plant and related infrastructure. Acron reported in late August that vertical shaft-sinking was 70 percent complete (GM Aug. 30, p. 25).
Talitsky, which is being developed by Verkhnekamsk Potash Co. (VPC), a majority-owned (60.1 percent) subsidiary of Acron, will have design capacity to produce some 7.5 million mt/y of potash ore and 2 million mt/y of potassium chloride. Acron confirmed its previously announced target of a 2023 commissioning of the new mine and processing plant, adding that it continues to expect full design capacity to be reached in 2026 (GM Aug. 30, p. 25).
Acron put the total capital budget for the Talitsky potash project at $2.6 billion, including previously incurred expenses and VAT. This figure is presumed to include the cost of the license to develop the Talitsky section of the Verkhnekamkoye potassium and magnesium salts deposit, acquired in 2008. In August, the Russian fertilizer group had put the total required capital expenditure for the project at $1.5 billion, but said that figure excluded the cost of the license (GM Aug. 30, p. 25).
Acron revealed in late August that it was considering a subsequent expansion of production at Talitsky to 2.6 million mt/y following full ramp-up of the initial capacity (GM Aug. 30, p. 25). It put the cost of this expansion at $0.3 billion.
At that time, the Russian fertilizer group said it expects to consume some 700,000 mt/y of the potash produced in-house from 2025. It currently buys in all of its potash requirements, largely for its complex fertilizers production.