Commodities

Financing the development of battery chemicals production

Image source: Terrafame, 2022

Macquarie’s Commodities and Global Markets group provides a $US90 million working capital facility to support the continued development and ramp-up of a client’s battery chemicals plant and production of battery-grade nickel and cobalt sulphate.

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Sector Commodities, Energy
Sub-sector Metals, Chemicals 
Location Finland

Opportunity

Historically, Terrafame Limited (Terrafame) has been a global supplier of intermediate nickel and cobalt products into the battery supply chain, producing mixed sulphide precipitate from its processing facilities in Sotkamo, Finland. 

Having completed construction of its €250 million battery chemicals plant in 2021, Terrafame is now able to refine these intermediates – previously sold as raw material to metal refining companies – itself. This moves the company forward in the refining value chain and enables it to produce nickel and cobalt sulphates, the key ingredients used in electric vehicle batteries.

Approach

Macquarie provided a $US90 million facility via a four-year prepayment structure to support Terrafame’s working capital requirements to ramp up production at the battery chemical plant. It also leveraged its physical execution and logistics expertise to intermediate cargoes of nickel sulphate between Terrafame and its end buyers.

The solution met the constraints of Terrafame’s existing capital structure while allowing them to retain full control over the marketing of their product. However, it has since undergone a refinancing exercise that resulted in early repayment of Macquarie’s working capital facility.

Outcome

With the plant holding one of the world’s largest production units for nickel sulphates used in electric car batteries1 (sufficient to supply ~1 million electric vehicles per year2), increased production has allowed Terrafame to provide a timely response to the rising demand for electric vehicles, particularly in the European market.

Importantly, Terrafame’s production output supports the global energy transition, while the integrated production process, by having both mining and processing facilities on one industrial site, creates a highly energy-efficient and traceable value chain. As a result, the carbon footprint of the nickel sulphate produced by Terrafame is among the smallest in the industry.2

We are very pleased to have strengthened the relationship with this globally significant nickel producer and support them through their transition to the battery chemicals markets. We look forward to working with Terrafame in the future as they continue to ramp up and place their material with end-buyers.”

Rohan Westcott
Executive Director, Commodities and Global Markets

  1. Battery chemicals, Terrafame, 2024
  2. ‘Promoting a Sustainable Battery Value Chain’, Sustainability Review – June 2023, Terrrafame

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