Green Energy: Meridian sells Australian business to Shell consortium, Vulcan nabs lithium off-take deal

Meridian Energy (ASX:MEZ) has agreed to sell its Australian business to a consortium of Shell Energy Operations Pty Ltd – a wholly owned subsidiary of Shell and Infrastructure Capital Group (ICG) — for $729 million.

The deal will see Shell become the owner of the retail business, Powershop Australia while ICG is set to become the owner of the infrastructure assets (Mt Mercer and Mt Millar wind farms, Hume, Burrinjuck, and Keepit hydro power stations and development assets).

Meridian CEO Neal Barclay said the transaction is an outstanding result for the company’s shareholders.

He said the transaction represents “an exciting opportunity for the future of the Meridian Energy Australia business, given Shell’s and ICG’s intentions to grow their respective renewable energy and retail presences in Australia.”

“With emissions the problem, and renewable energy the solution, the buyers are readying to invest heavily in a cleaner future,” he said.

“The Meridian Australia team will be at the heart of a transformation that is not only good for Australia, but also the planet.”

The sale is subject to limited conditions precedent, including Shell receiving foreign investment approval from the Australian Government.

Completion is expected to occur in the first quarter of 2022.

Agreements have been put in place with Flux Federation, a Meridian subsidiary, for Powershop Australia’s retail software services and Meridian Energy Australia’s call centre based in Masterton.

In addition, a transitional services arrangement has been agreed, which will allow for a transition of services currently provided by Meridian Energy Limited to Meridian Energy Australia for a period of up to 12 months

Vulcan nabs binding lithium offtake agreement with Renault

Vulcan Energy (ASX:VUL) has signed a binding lithium hydroxide offtake agreement with major automotive manufacturer Renault Group, which will see it purchase between 26,000 to 32,000 metric tonnes of battery grade lithium chemicals over the duration of the agreement.

Shares are up 7.5pc on the news this morning to $10.95.

Consistent with Vulcan’s strategy to decarbonise the battery materials sector, the partnership with Vulcan will allow Renault to avoid between 300 to 700kg of CO2 equivalent emitted for a 50-kwh battery.

The agreement is for a six-year term with the start of commercial delivery set for 2026 and pricing to be based on market price on a take-or-pay basis.

VUL managing director Dr Francis Wedin said the completion of this definitive offtake agreement means Vulcan’s zero-carbon lithium business will be directly enabling Renault to meet its commitment of producing carbon free EV batteries and becoming carbon neutral.

For Vulcan he said the agreement is consistent with the company’s strategy “to enter into long term, stable supply agreements with companies that share a similar ethos on sustainability and decarbonisation ambitions.”

Blackstone increases exposure to large Canadian Nickel Sulphide Project

Blackstone Minerals (ASX:BSX) has made a strategic investment in Flying Nickel Mining Corp, a subsidiary of Vancouver-based Silver Elephant Mining Corp in Canada.

Flying Nickel intends to list on the TSX Ventures Exchange (TSX-V) in early 2022 with its core asset the Minago Nickel Sulphide Project, southwest of Thompson in Manitoba, Canada

Minago is an advanced stage development asset “with district scale exploration potential and excellent access to infrastructure including renewable hydropower,” BSX said in an announcement this morning.

Blackstone’s initial investment of C$2.98m will earn a 6.85% interest in the common equity of Flying Nickel.

The two companies have also entered a memorandum of understanding (MOU) that will see collaboration on the production of upstream and downstream nickel and cobalt concentrates and chemical products, as well as potential offtake and / or joint ventures to meet demand from the growing electric vehicle battery industry.

The Equity Investment and MoU together represent the “Flying Nickel Transaction.”

Managing director Scott Williamson said the known mineral endowment of the Minago asset — in combination with the potential of the Ta Khoa district — represents enviable scale, being highly sought after by OEMs, battery, and cathode manufacturers.

“Large, disseminated nickel sulphide deposits of the size and grade of the Minago asset are difficult to find,” he said.

“The ongoing structural evolution of nickel supply chains and increasing demand for downstream nickel chemical products for the lithium-ion battery industry, is driving a unanimous view by analysts and the broader investment community that higher nickel prices are here to stay for longer.”

“This means that large undeveloped opportunities such as Minago are primed to overcome previous barriers, including access to capital,” he said.

“The Flying Nickel Transaction provides Blackstone with opportunity to collaborate on the development of Minago, and confidence to inject future equity into the asset as it is progressively de-risked.”

Blackstone believes the Ta Khoa Refinery in Vietnam is a logical home for Minago concentrate.

“Manitoba, like Northern Vietnam, is blessed with access to renewable hydro power. Shipping a high-grade concentrate minimises carbon footprint and is aligned with Blackstone’s commitment to best ESG practices and ambition to become a supplier of choice to the electric vehicle battery industry,” Williamson said.

Silver Elephant Mining Corp’s wholly owned subsidiary, Flying Nickel, holds 100% of the Minago asset.

Blackstone is participating in a private placement which will lead to the Minago asset held by Flying Nickel being spun out of Silver Elephant, with Flying nickel separately listed on the TSX-V.

The Flying Nickel Transaction is subject to Silver Elephant Shareholder approval due late December 2021.

MPower taps investors to fund growth

MPower Group (ASX:MPR) has launched an offer to eligible shareholders to participate in a share purchase plan (SPP).

MPower didn’t specify how much it intends to raise from the SPP, but said shareholders can apply for up to $30,000 worth of new ordinary shares, at an issue price of 5 cents per share.

The issue price marks a 24.2% discount to the 30-day VWAP (volume weighted average price).

Funds raised will enable the company to carry out its Build-Own-Operate strategy, MPR said, through the acquisition and development of renewable energy site, MPower said. Funds will also be allocated to general working capital.

The offer is expected to open on Wednesday, November 24 and remain open for subscription until 5pm AEDT on Thursday, December 16.

Chief executive officer Nathan Wise said: “The new funds will enable MPower to expand its pipeline of Build Own Operate sites and accelerate its plans to establish a portfolio of 5MW renewable energy projects in Australia.”