Shares for Renascor Resources Ltd [ASX:RNU] were soaring yesterday after announcing the Australian government has conditionally approved a $185 million loan facility for their Siviour Graphite Project.
Renascor is planning to develop a graphite mining and manufacturing operation to produce battery anode material for use in lithium-ion batteries.
Located in South Australia, the Siviour Graphite Project was granted major project status by the government in September last year.
Renascor will mine the graphite from the Siviour Graphite Deposit, which is the largest graphite reserve outside of Africa. It will then process it in their state-of-the-art processing facility to turn it into purified spherical graphite through Renascor’s ‘eco-friendly’ purification process.
Developing critical minerals crucial for the EV revolution
The loan was approved under the $2 billion Critical Minerals Facility, a program created by the Australian government in September last year to help develop Australian critical minerals projects.
The program is managed through Export Finance Australia (EFA), with the objective to develop critical minerals supply chains that are essential for the new energy economy.
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As Renascor’s Managing Director David Christensen said:
‘The Siviour Graphite Project represents an important opportunity for Australia, and South Australia in particular, to develop a world class, globally competitive downstream processing capability in a critical mineral that is fundamental to the development of the electric vehicle revolution. The support from the Australian Government and EFA is a significant and tangible endorsement of this opportunity and Renascor’s ambition to become a world-leading supplier of Purified Spherical Graphite.’
Renascor’s loan approval is dependent on several conditions, which if satisfied, will bring in a final investment decision this year.
Loan covers most of the funding needed
The Siviour Graphite Project is estimated to cost $204 million, so the loan provides much of the funds needed for the project.
It’s why Renascor’s shares were up 19% yesterday after announcement, closing at 29 cents. They are slightly down today at 27.7 cents at time of writing.
Battery metals like graphite and lithium are key for the energy transition. If you are interested in investing in lithium, check out our complete guide ‘How to Invest in ASX Lithium Stocks Ahead of the Clean Energy Revolution’.
You can find it here.
Editor, Money Morning
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