UK investment firm injects US$40m into Mayur Resources’ PNG lime project

Mayur Resources (ASX: MRL) now has the equity financing it needs to develop its Central lime project in Papua New Guinea after a British investment company signed a term sheet to pay US$40 million for a 49% equity stake in the project.

The proposed investment comes from Guernsey-registered Vision Blue Resources (VBR), headed by the ex-chief executive officer of the former mining giant Xstrata, Sir Mick Davis.

Mayur believes the proposed investment will be sufficient to cover the total equity required for the project.

After completing the deal, Mayur and VBR will jointly finalise debt financing, with the Australian government included in the process, given the stated significance of this project to the Papua New Guinean economy.

Mayur expects this project to return annual EBITDA of over US$25 million over a 30 year project life in its first phase. First revenues are targeted for the first half of 2024.

Asia-Pacific’s first carbon neutral producer

Mayur’s lime project is located 25km north of PNG’s capital, Port Moresby, and just 7km from Exxon’s US$18.5 billion liquefied natural gas plant.

Lime is used in multiple applications including removing impurities in steel making, in the treatment of copper, zinc, lead, gold and silver ore, in road laying, improving crop yields, and in paper, cement and plastic production.

It will mean a new manufacturing industry for PNG, generating hundreds of jobs, and will also make PNG self-sufficient in lime and will also supply export markets.

Meeting demand for global energy transition

The Central Lime project is also intended to become the Asia-Pacific region’s first carbon-neutral producer.

The project is being positioned to meet increasing demand from the critical minerals and battery metals processing sectors and will support the global energy transition, Mayur says.

“The [project’s] lime products will also meet standards for the construction, environmental and pollution abatement sectors,” the company added.

Investor looking for battery, technology opportunities

Sir Mick Davis established VBR in December 2020 to “identify and capture opportunities linked to the global transition to clean energy production and storage,” the announcement says.

His background includes building Xstrata into one of the largest mining companies in the world, leading to its being taken over by Glencore.

Vision Blue targets companies in established mining jurisdictions that can be brought into production rapidly.

Since its launch, Vision Blue has become involved in graphite, vanadium, silicon metal, tin and rare earths.

Mayur expects the lime project to be producing first revenues in the first quarter of 2024 and having a mine life of 30 years over which period it is expected to generate more than A$1.16 billion in revenue.

Commenting on the project, Sir Mick Davis said: “The importance of lime supply to the processing of minerals and metals linked to the energy transition is considerable and the Mayur leadership team’s credentials in this market are world- class.”

“The project in PNG is compelling in terms of its size, scalability and quality, given the high calcium content of the deposit.”

“The project has an attractive low risk profile which aligns well with VBR’s investment criteria, is fully permitted, construction is underway, and benefits from project developed road and port infrastructure– all located in a strategic location, to support the PNG and greater APAC markets,” he added.

Plans to be dominant player

The project is fully permitted and construction began in July.

Mayur’s managing director Paul Mulder said Vision Blue is a partner of “impeccable pedigree”.

“The project will see PNG become a pivotal contributor to the regional and global lime industry,” he added.

Mr Mulder said that the new partnership plans to become a dominant player not only in Australia but also the APAC (Asia-Pacific) region.

Indonesia will see increasing demand as more nickel high-pressure acid leach plants come online.

Indonesia’s lime demand is forecast to rise at a 14.6% compound annual growth rate through to 2030.