The federal government's Northern Australia Infrastructure Fund (NAIF) has reaffirmed its support for a proposed mineral sand mine in the Kimberley despite investigating its relationship with a privately owned Chinese company last year.
In an announcement posted to the ASX on Thursday, Sheffield Resources said the NAIF would be upping its original support of the project – the Thunderbird mine between Broome and Derby – to $160 million.
That is a $65m jump for the project — the NAIF originally committed a $95m loan in 2018.
The announcement marks the end of significant funding issues for the project, which saw it mothballed in early 2020.
Sheffield executive chair Bruce Griffin said the finance would go a long way to finally getting the project underway.
"Sheffield is extremely pleased by the level of support shown by NAIF and the federal government for the Thunderbird Mineral Sands project," he said.
"The NAIF commitment will enable KMS to finalise project funding requirements for Thunderbird and progress construction activities with the aim of delivering first production in early 2024."
'Great endorsement'
The funding increase comes months after NAIF said it was investigating Sheffield's involvement with Chinese steel producer Yansteel.
Yansteel came to the project when the company struggled to raise the $500m construction cost, and agreed to fund the mine through a joint venture, Kimberley Mineral Sands.
NAIF said the company's decision to partner with the Chinese-owned company meant it would need to vigorously investigate whether the federal government would continue to support the venture.
KMS chief executive Stuart Pether said NAIF's eventual choice to nearly double the original loan commitment was a "great endorsement" of the project.
"We've spent over $16m with … local Kimberley businesses over this last financial year and it's great to be able to have the certainty of this funding to enable us to make more commitments in the Kimberley," he said.
"This NAIF decision is a massive step forward, [there's] certainty that comes with the federal government support.
"These are massive milestones for our business and we're very confident we'll be moving forward — so confident that we've started some of the construction works onsite now."
Social licence still under cloud
There are still concerns about the company's operations in the Kimberley town of Derby after the mine initially flagged it would aim to run its operations out of the port in 2018.
The town and council were strong advocates for the project when the company struck a deal to upgrade Derby's ageing jetty, flagging about 350 jobs.
But that support dwindled last year when the company said it had not fully committed to Derby and was still investigating using Broome Port due to costs and logistics.
Mr Pether said a decision was still yet to be made on where the company would base its export operations.
"First of all we need to finalise the government approvals," he said.
"We're hoping that'll happen in the first half of this year as well, and then we will finalise commercial agreements with Broome and all Derby and make that decision.
"The port of Broome is purpose-built for export, like we'd like to do.
"Derby also is a very suitable port for our logistics.
