Koch Minerals & Buying and selling, LLC (KM&T), a various international buying and selling, logistics and funding firm and subsidiary of Koch Industries, Inc. (KII), is making a $252-million funding in Compass Minerals, a number one international supplier of important minerals, to assist phase-one growth of its beforehand recognized 2.4 mMT lithium carbonate equal (LCE) Nice Salt Lake useful resource and debt discount.
Roughly $200 million of the funding are anticipated for use to advance the primary part of the corporate’s sustainable lithium growth venture. This determine represents roughly 75% of complete phase-one funding wants, in keeping with the corporate’s FEL-1 degree venture price estimates, together with the total funding required via calendar 12 months 2024 towards the development of a business scale, direct lithium extraction (DLE) and lithium conversion plant on the firm’s Ogden, Utah, photo voltaic evaporation facility.
Compass Minerals has chosen EnergySource Minerals (ESM) because the DLE expertise supplier following three years of intensive testing of a number of DLE applied sciences. In pilot checks up to now, ESM’s proprietary ILiAD adsorption expertise has confirmed profitable in processing Compass Minerals’ brine useful resource throughout 4 key evaluation classes: lithium restoration; magnesium rejection; minimized environmental affect; and business readiness.
Adsorption is a confirmed DLE expertise already in use for business manufacturing at a number of lithium brine operations globally. Moreover, early conversion testing of Compass Minerals’ brine throughout a variety of working parameters has supplied confidence within the scalability of the deliberate DLE facility to be positioned at Compass Minerals’ operations in Ogden, Utah.
Compass Minerals beforehand engaged Veolia to conduct lithium chloride to lithium hydroxide conversion testing because the first-known conversion to battery grade lithium hydroxide of lithium brine originating from the Nice Salt Lake. The ensuing conversion pattern met established battery-grade specs for the US home electrical automobile and vitality storage markets.
Compass Minerals expects the venture’s annual business manufacturing capability to finally be roughly 35 kMT LCE, with an preliminary phase-one capability of roughly 11 kMT LCE coming on-line by 2025.
As a part of the settlement, the businesses can even discover worth creation alternatives throughout Compass Minerals’ broader operational platform by leveraging the expansive capabilities of KII’s many working subsidiaries, together with within the areas of provide and procurement of gasoline and uncooked supplies, freight and logistics synergies, and venture engineering and growth assist.
Compass Minerals expects to make use of the remaining $52 million of proceeds from the KM&T funding, much less transaction bills, to scale back debt, representing a major step towards aligning the corporate’s capital construction with its company progress technique.
Below the phrases of the funding settlement, KM&T has agreed to buy 6,830,700 shares of Compass Minerals widespread inventory at a worth of $36.87 per share, leading to proceeds to Compass Minerals of $252 million. The issuance worth represents a 6.2% low cost to the closing worth and an 8.0% low cost to the 5-day quantity weighted common worth as of 13 September 2022. The personal placement of shares is topic to the satisfaction of customary closing situations, together with the expiration or termination of the ready interval below the Hart-Scott-Rodino Antitrust Enhancements Act of 1976 evaluate. The personal placement of shares is predicted to shut within the fourth quarter of calendar 12 months 2022, topic to the satisfaction of customary closing situations.
After the transaction closes, KM&T will personal roughly 17% of Compass Minerals’ excellent shares of widespread inventory and could have the flexibility to nominate two extra members to the Compass Minerals board of administrators.
Perella Weinberg Companions LP acted as sole monetary advisor to Compass Minerals within the transaction and Cleary Gottlieb Steen & Hamilton LLP acted as the corporate’s authorized advisor. Jones Day acted as authorized advisor for KM&T.