Ethos Asset Management, based in San Diego, California, has agreed to provide long-term financing to Thai-Sing Potash Trading (TSPT), starting with an initial investment of US$50 million which is expected to increase to US$1 billion in six years.
The capital infusion will be used to develop a greenfield mine in three years to supply potash to Thailand with the remaining volume to be exported to fertilizer producers and traders worldwide.
Thailand is one of the top importers of fertilizer globally, sourcing about 5 million tonnes each year from Asia and Europe, particularly Belarus and Russia. The war in Ukraine has significantly affected its supply, especially from those two countries.
Despite the substantial demand, Thailand can only meet a small percentage of its domestic requirements. As such, the project will substantially reduce the country’s dependence on imported fertilizers while possibly creating extra revenue through surplus quantities, Ethos says. It will also enhance local employment opportunities.
“In addition to its clear economic value, the project will provide noteworthy social benefits to the community within and surrounding the mining area. Environmental benefits include reforestation to expand the surrounding green zone, providing protection for local water resources, and improving local infrastructure through road improvements,” says Ethos president and chief executive officer Carlos Santos.
The project will involve two key entities – TSPT and Asia Pacific Potash Company (APPC). TSPT will obtain financing from Ethos, supported by product off-take agreements from both end-users and global trading companies. APPC, the project developer under a concession from the Thai government, will hire Italian-Thai Development to be the engineering, procurement and construction contractor whose works will be funded by product sales to TSPT.
Thai-Sing Potash Trading is a Singapore-based special purpose vehicle company established to facilitate funding for project development and to be a potash trading company for APPC. APPC is 90% owned by Italian-Thai Development.