MNB pushes ahead with fertiliser project

This morning, our fertiliser and green ammonia Investment Minbos Resources (ASX: MNB) set some new guidance on the timeframe for construction of its fertiliser project in Angola.

Below is the timeline through to production:

Wet commissioning is scheduled for August 2024, which would mark a major achievement for MNB - we’re eagerly awaiting production.

MNB had initially earmarked November 2023 to start the commissioning of its plant, however issues with the EPC (engineering contractor) meant that these timelines were pushed out.

Today’s update also noted that after a review of the project there were material cost savings and improved project design.

Issues can and do happen when constructing new projects, particularly when working to tight timeframes and in developing countries.

However, we think that MNB has done well to turn this delay into a “win” as the company pushes forward towards maiden production of its project with a better design and at a cheaper cost.

Previously, in October of last year, MNB announced a term sheet for $14M of debt funding from the Industrial Development Corporation of South Africa.

We expect as the fertiliser (phosphate) project gets closer to production the company will receive additional inbound interest from potential financiers looking to help fund a project that looms as a key pillar of food security in Angola and the wider Southern Africa region.

What’s next for MNB?

🔄 Funding for the remainder of CAPEX on the project

MNB has announced that it will require US$26M to fund the project through to production.

With the US$14M secured previously, it leaves a further ~US$12M of funding left. With reductions in costs announced today, we’re hoping the gap to close is even smaller.

We will get a better idea of MNB’s current cash balance in the coming days as it reports its cash balance for the December quarter.

🔄 First production

A hiccup with a previous EPC contractor has seen MNB take control of the management of EPC contracts - we are now expecting first production sometime around August.

🔄 Results of P4 Study

MNB has commenced a concept study into whether its phosphate waste product is suitable for P4 in LFP batteries (the types used in Chinese electric vehicles).

MNB has a Strategic Cooperation Agreement in place with a syndicate of Chinese new energy materials investors - controlled by the Chairman of CATL.

This study is due by the end of the year with the outputs expected to form part of a joint venture with interested parties.