March 29, 2018 / 5:06 PM / 22 days ago

Kore Potash to tap investors for $600 mln towards Congo Rep mine

LONDON, March 29 (Reuters) - Kore Potash plans to tap the market in 2019 for $600 million to help fund its $1.86 billion mine project in Congo Republic, its chief executive said on Thursday.

The miner, listed in Australia, raised $13 million in its stock market debut on Thursday in London and Johannesburg. The proceeds from the listing will contribute towards the cost of running the business until the investor cash call next year.

CEO Sean Bennett told Reuters Kore hopes to raise $600 million in London and Johannesburg for its Kola project, with the balance obtained through debt funding.

“By early next year we are seeking to raise that equity so bringing the listing to the market at this time made sense because it gives us time to get investors comfortable and ready to participate in a big placement,” Bennett said.

Bennett said Australian capital markets lacked the appetite to fund a large project in Africa.

Global prices of potash, a fertiliser ingredient, are slowly perking up as plant closures ease oversupply in the roughly 65 million tonne market.

The Kola project is expected to begin production at the end of 2022, the company said. It is awaiting the completion of a definitive feasibility study that will be ready in the third quarter of 2018.

Kore plans to produce potash at the relatively low cost of $100 per tonne for delivery to top consumer Brazil due to the shallow nature of the mine, the ease of processing the product and the mine’s proximity to ports, Bennett said.

The Kola project will produce 2 million tonnes per year.

Kore’s main investors include Oman’s sovereign wealth fund SGRF, which owns 19 percent, and Chilean lithium and potash miner SQM, with 17.6 percent.

Kore is awaiting parliamentary approval of a convention that will protect the company against any changes to Congo Republic’s mining code.

Meanwhile, mining companies operating in Democratic Republic of Congo are negotiating over the implementation of a strict new set of laws that include a 50 percent tax on windfall profits.

Reporting by Zandi Shabalala; Editing by Dale Hudson

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