Commitment to zero-carbon projects pays off for Minbos Resources
We know that best in class ESG companies attract more capital, better customers, and top talent and Minbos Resources is demonstrating that.
The company, whose shares trade on the Australian Securities Exchange (ASX), is developing two projects in Angola with positive social and environmental impact: the Cabinda Phosphate Fertiliser Project and the Capanda Green Hydrogen Ammonia Project.
Minbos has adopted the World Economic Forum ESG framework, as revealed in its latest corporate presentation, with Socialsuite assisting in streamlining the outcomes measurement and ongoing ESG reporting process.
The company’s Capanda Green Hydrogen Ammonia Plant is being developed to produce zero carbon ammonia which is used in fertilizers and explosives.
Producing ammonia is traditionally very carbon intensive — over 90% is made using natural gas or coal, in a process that has a carbon footprint almost twice that of steel and four times worse than cement.
Minbos’ ammonia project, however, would be entirely carbon free
The company recently signed a long-term offtake agreement with Angola’s electricity network operator to supply Minbos with zero carbon hydro-electrical power. The green ammonia will be produced from green hydrogen, which is produced using possibly the world’s lowest cost renewable energy.
So not only is this hydro-electric power carbon free, but it is possibly the cheapest green power anywhere in the world today. Its supply will underpin the company’s Green Hydrogen Ammonia Project.
Not only carbon intensive, producing zero carbon ammonia and the green hydrogen would typically be prohibitively expensive, rendering projects uneconomical against producing traditional fossil fuel ammonia.
This access to clean, carbon-free, cost-effective power, uniquely positions Minbos to create green ammonia economically. For traditional producers to build clean energy infrastructure would cost billions of dollars and take many years.
Green ammonia was expected to achieve cost parity with fossil-based ammonia beyond 2030. But Minbos has the potential to achieve this years in advance thanks to its ready access to cheap green hydro-electrical power supply.
Therefore, it is no surprise that Minbos is fielding “significant enquiries from potential technical, off-take and investment partners for the Green Hydrogen-Ammonia Project”.
Creating value through ESG for all stakeholders
As for its Phosphate Fertiliser Project, Minbos’ ESG goals here are multifaceted — to help solve food security and nutrition, decrease poverty, and mitigate the effects of climate change on farmers in sub-Saharan Africa.
It’s no secret that investors are actively seeking to invest in ESG-aligned companies and recent developments have certainly shown that to be true for Minbos.
The company has just completed a $25 million capital raise — a sizeable raise, especially in the context of Minbos having a market valuation of just $75 million today.
The raise included a strategic $15 million cornerstone investment from a syndicate of investors, including an entity led by Mr Liang Feng, the chairman of the world’s largest battery anode producer, the US$18 billion “Shanghai Putailai New Energy Technology”.
Mr Feng is also founder and chairman of Shanghai Jayson New Energy Materials, which mines green energy metals (cobalt, copper and nickel, etc.) across several continents, producing cathode materials for lithium batteries.
This investment in Minbos further speaks to the growing attractiveness of ESG aligned investments and the challenge facing investors in finding quality ESG companies to invest in.
Source: Minbos Resources Corporate Presentation, July 2022
The capital raise is only part of the story
Following the raise, Minbos also signed a non-binding term sheet for a $25M debt facility that Minbos can negotiate should it need. This could go a long way towards putting Minbos’ phosphate fertiliser project into production, for which a 2020 scoping study estimates upfront capital costs of US$22-28M.
Mr Feng’s syndicate of investors also approached Minbos to sign a strategic cooperation agreement to jointly develop lithium ferro phosphate and large-scale green ammonia projects.
Minbos CEO Lindsay Reed explained that, "the Company was approached by a syndicate of investors looking to partner in developing some of the most exciting green energy projects globally” and he credited the investors’ “strong commitment to zero-carbon green energy projects” in their decision to approach the company.
Minbos’ green credentials has also seen it sign an MOU with Stamicarbon, a global leader in green ammonia production, to conduct a six-month technical study for its green ammonia plant.
Stamicarbon described the project as, “not only one of the best Green Energy-Powered-Projects globally, but potentially the first green ammonia project that is truly competitive with traditional fossil-fuel alternatives”.
Clearly, Minbos is walking the walk when it comes to ESG, and demonstrating the increasing importance of strong ESG credentials.
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