NAB stands behind Townsville battery gigafactory

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In a show of confidence in the project’s potential, National Australia Bank (NAB) is backing Townsville’s planned $2 billion lithium-ion battery gigafactory. With a comprehensive feasibility study in its final phase, the project proposal is expected to move into the development approval process in the coming months, while project proponents will be on the lookout for debt finance.

According to Magnis Energy, Australia’s graphite miner and one of the three members of the Imperium3 Townsville consortium, NAB has come on board after significant due diligence. “For NAB to put their name to anything and come on board is a big deal,” Magnis chairman Frank Poullas told the Townsville Bulletin. “The fact they are confident they can work with us raise the necessary funds to get Townsville up and running is a huge testament to us.”

The project, which is expected to create over thousand jobs, is making progress with the draft feasibility study now completed. Following the technical design and engineering programs of work, a preliminary draft feasibility study report was completed to enable subsequent work programs associated with financial analysis, independent review and market developments to be progressed. “This work is rapidly nearing completion and the feasibility study report is on track for completion and submission by the end of this month,” Magnis said in a statement.

According to Magnis Energy’s earlier update, the initial findings of the feasibility study supported the rapid development in both the business case and technical solution for the Townsville gigafactory. Conducted by Imperium3 Townsville consortium, which consists of Magnis Energy, C4V LLC New York and Boston Energy and Innovation, the feasibility study was underpinned by the Queensland government, which provided $3.1 million towards the project last year.

Minister for State Development, Manufacturing, Infrastructure and Planning Cameron Dick stated at the time that the study is a key requirement for attracting the next stage of funding and is expected to be completed in 2019. “We expect Imperium3 will make the final investment decision by mid-2020,” he said.

According to Magnis’ statement to the ASX, the decision was made to phase the project development into three stages at 6 GWh. “This not only reduces the upfront capital requirement but also allows for the project expansion to occur in line with market development,” the statement said.

As the developer of the Lansdown Industrial Precinct, where the battery plant will be located, Townsville City Council will assume a “small ownership stake in the project.” The precinct is intended to be Northern Australia’s first environmentally sustainable advanced manufacturing, processing and technology estate. It will be powered by 200 MW Majors Creek Solar Farm, which is being developed by Edify Energy.

As for next steps, the project proponents intend to engage more with local government and business. According to Magnis, the project continues to receive strong support from all levels of government.

“Having NAB as the financial advisor with respect to the project is a huge step forward as we continue to tick the boxes,” said Marc Vogts, Magnis managing director . “From day one we believed that the Townsville project is imperative for Australia’s energy security, and I believe that all forms of government share my sentiments.”