Koch invests $252M in Compass Minerals to help improvement of lithium brine challenge in Utah; ESM for DLE

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Koch Minerals & Buying and selling, LLC (KM&T), a various international buying and selling, logistics and funding firm and subsidiary of Koch Industries, Inc. (KII), is making a $252-million funding in Compass Minerals, a number one international supplier of important minerals, to help phase-one improvement of its beforehand recognized 2.4 mMT lithium carbonate equal (LCE) Nice Salt Lake useful resource and debt discount.

Roughly $200 million of the funding are anticipated for use to advance the primary part of the corporate’s sustainable lithium improvement challenge. This determine represents roughly 75% of whole phase-one funding wants, in accordance with the corporate’s FEL-1 degree challenge price estimates, together with the complete funding required via calendar yr 2024 towards the development of a industrial scale, direct lithium extraction (DLE) and lithium conversion plant on the firm’s Ogden, Utah, photo voltaic evaporation facility.

Compass Minerals has chosen EnergySource Minerals (ESM) because the DLE expertise supplier following three years of intensive testing of a number of DLE applied sciences. In pilot checks to this point, ESM’s proprietary ILiAD adsorption expertise has confirmed profitable in processing Compass Minerals’ brine useful resource throughout 4 key evaluation classes: lithium restoration; magnesium rejection; minimized environmental influence; and industrial readiness.

Iliad

Adsorption is a confirmed DLE expertise already in use for industrial manufacturing at a number of lithium brine operations globally. Moreover, early conversion testing of Compass Minerals’ brine throughout a variety of working parameters has offered confidence within the scalability of the deliberate DLE facility to be situated at Compass Minerals’ operations in Ogden, Utah.

Compass Minerals beforehand engaged Veolia to conduct lithium chloride to lithium hydroxide conversion testing because the first-known conversion to battery grade lithium hydroxide of lithium brine originating from the Nice Salt Lake. The ensuing conversion pattern met established battery-grade specs for the US home electrical car and vitality storage markets.

Compass Minerals expects the challenge’s annual industrial manufacturing capability to finally be roughly 35 kMT LCE, with an preliminary phase-one capability of roughly 11 kMT LCE coming on-line by 2025.

Ogden

As a part of the settlement, the businesses may even discover worth creation alternatives throughout Compass Minerals’ broader operational platform by leveraging the expansive capabilities of KII’s many working subsidiaries, together with within the areas of provide and procurement of gas and uncooked supplies, freight and logistics synergies, and challenge engineering and improvement help.

Compass Minerals expects to make use of the remaining $52 million of proceeds from the KM&T funding, much less transaction bills, to cut back debt, representing a big step towards aligning the corporate’s capital construction with its company progress technique.

Below the phrases of the funding settlement, KM&T has agreed to buy 6,830,700 shares of Compass Minerals widespread inventory at a worth of $36.87 per share, leading to proceeds to Compass Minerals of $252 million. The issuance worth represents a 6.2% low cost to the closing worth and an 8.0% low cost to the 5-day quantity weighted common worth as of 13 September 2022. The non-public placement of shares is topic to the satisfaction of customary closing situations, together with the expiration or termination of the ready interval beneath the Hart-Scott-Rodino Antitrust Enhancements Act of 1976 assessment. The non-public placement of shares is predicted to shut within the fourth quarter of calendar yr 2022, topic to the satisfaction of customary closing situations.

After the transaction closes, KM&T will personal roughly 17% of Compass Minerals’ excellent shares of widespread inventory and can have the power to nominate two further members to the Compass Minerals board of administrators.

Perella Weinberg Companions LP acted as sole monetary advisor to Compass Minerals within the transaction and Cleary Gottlieb Steen & Hamilton LLP acted as the corporate’s authorized advisor. Jones Day acted as authorized advisor for KM&T.

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