What you have calculated above closely aligns with BCI Mineral's Mardie Salt Project BFS values.
Mardie though, would be producing 4.4 mtpa of salt and 120 ktpa of SOP for a NPV7 of 1197 million. Mardie's total CAPEX (including owner’s costs, project management, growth allowances and contingencies) is 779 million.
I can see the Solmar project having a significantly higher CAPEX given the non-aligned infrastructure for PVC. All the remaining products align quite nicely in terms of required infrastructure and the process.
Also, PVC is not as easy to manufacture as one might think. Have a look at this YouTube video for an idea of the complex industrial setup required to produce PVC.
Here is my table explaining the revenues with the proposed tonnages of product (All prices are AUD)
and a Pie Chart for a more visual understanding:
I am deeply concerned that 64% of the revenue is coming from PVC manufacture which in itself, is very energy intensive and complex to produce. Its not as easy as just mixing Ethylene and Chlorine together and attaining PVC, as some would think.
Lets analyse the CAPEX requirements of this project.
BCI's CAPEX sits at around 779 million. This is only for a 4.4 mtpa salt and 120 ktpa SOP - the industrial setup here is easy compared to that required for PVC. FIN will be producing 25% more salt and 17% more SOP - lets say this adds another average of 21% more CAPEX which means an extra $164 million to the budget, giving us around 779+164 = $942 million.
We haven't even added CAPEX for the Chlor-Alkali plant, PVC plant and the Solar+Wind capital costs.
Add another $50 million for chlor-alkali (Lots of marine grade SS will be used here, but a relatively uncomplicated setup), another $300 million for PVC plant and assume a figure of around $100 million for a Solar/Wind farm.
We're looking at a grand total of $1392 million or approx $1.4 billion.
This is a MASSIVE amount of CAPEX. So, to spread the love around, FIN has decided to go down the route of Project Partnering as the delivery method. Sounds fantastic and all of a sudden doable except for the fact that the risk and hence the rewards are now split between FIN and its partners.
If FIN had partners for PVC, the Port Infrastructure, Solar+wind farm, the CAPEX costs would be drastically reduced, but the revenue from PVC (64%) would be split between the project partner and FIN - this is a signficant proportion of our revenue.
The solar/wind farm might be operated on a BOOT methodology with the owner-operator charging FIN a very cheap rate for the energy and would make profit by selling of the excess to external private entities.
To conclude: The project is a MASSIVE undertaking and is definitely doable given the right project partners. But there are lot and lots of gears that need to mesh before the beast can take-off.
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- Ann: Sol Mar Project Corporate Presentation - November 2021
Ann: Sol Mar Project Corporate Presentation - November 2021, page-3
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