Finland Govt backs Neometals' vanadium tech with A$87M grant

Neometals will soon see its innovative technologies at the core of a giant vanadium recycling plant in the Finnish port of Pori. Credit: File

ASX listed Neometals (ASX: NMT) has welcomed the backing of the Government of Finland which will contribute a €48.7M (A$86.8M) grant towards the building of a vanadium recycling plant in the Finish port of Pori. The plant will recycle vanadium industrial waste streams using technology developed by Neometals which owns 86% of the €400M project and a 2.5% royalty over it.

The conditional investment grant comes courtesy of Finnish Government instrumentality Business Finland and the money will go into Novana Oy, the company that owns the project.

The funding targets construction of Europe's first carbon-neutral vanadium pentoxide (V2O5) facility known as the Vanadium Recovery Project 1 (VRP1) which is Novana Oy's flagship proposed €400 (~A$713) million facility in Pori's Tahkoluoto industrial zone.

VRP1 will become a circular economy powerhouse designed to recycle steel slag and recover high-purity vanadium pentoxide using Neometals’ patented leaching technology, while upcycling by-products into other construction inputs.

The grant – which is contingent on finalising the balance of equity and debt for the project – materially reduces the equity slice in the financing package, currently under SEB and EIT Raw Materials management.

SEB is a leading Nordic financial services group headquartered in Stockholm, Sweden, founded in 1856 by the Wallenberg family. It offers corporate, retail, investment, private banking, asset management and life insurance.

SEB’s role in VRP1 is co-managing the equity and debt financing process for Novana's vanadium project alongside EIT RawMaterials, using its expertise in Nordic industrial financing to attract investors and to structure debt for sustainable energy/metal initiatives.

EIT RawMaterials is Europe's largest consortium in the raw materials sector and was initiated and funded by the EU's European Institute of Innovation and Technology (EIT) in Berlin, Germany.

EIT RawMaterials is managing the equity package for the project's financing, providing access to its vast network of investors and aligning VRP1 with EU priorities for critical raw materials self-sufficiency, while enhancing de-risking and visibility for Neometals' technology deployment.

Neometals has signalled it will leave the financial heavy lifting to fund the plant to new investors and it will dilute down while retaining its 2.5% royalty over the project.

We would like to congratulate the Novana team and thank Business Finland and the Finnish government for their ongoing support of the project. Vanadium is on the critical minerals list in the EU, USA and Australia and this grant plays a significant role in reducing the equity required to fund the project which aims to produce vanadium with a zero-carbon footprint in the Nordics from an industrial side stream.

Neometals Managing Director Chris Reed

VRP1's fundamentals remain compelling. Its feasibility study confirmed lowest-quartile opex, a near-zero carbon footprint and a binding 100% offtake with Glencore for the resultant vanadium product.

Glencore is one of the world’s largest diversified mining and commodity trading companies and is headquartered in Switzerland, with global operations in metals, energy and agriculture.

The 100% binding offtake agreement with Glencore locks in sales for all VRP1 vanadium production at market-linked pricing, de-risking revenue and enhancing bankability.

The VRP1 target of 9000 tonnes per year vanadium pentoxide output – equivalent to 5-6% of global supply and up to 60% of Europe's needs – will address the continent's reliance on Chinese and Russian imports for vanadium that is vital for speciality steels and emerging battery applications.

Project site advantages include a long-term lease, secured environmental permits, proximity to the port of Pori and a skilled local workforce.

Construction will create up to 600 jobs, with 150 permanent roles post-commissioning in 2.5-3 years.

For Neometals, the grant validates the scalability of its technology and accelerates the realisation of its value through royalties and potential equity upside – all while advancing Finland's green industrial leadership and the EU's raw materials sovereignty.

As Pori positions itself at the vanguard of one sector of the European critical minerals sector, Neometals' long march to commercialise its unique leaching technology looks like it just got its first investor.

Is your ASX-listed company doing something interesting? Contact: office@bullsnbears.com.au