Global investment banking powerhouse ABG Sundal Collier is backing Pensana’s rare earth separation plant at Saltend, providing 60 per cent of the anticipated build cost.

A bond worth around $150 million (£123.5 million) is to be placed by the Norwegian financial giant with its institutional investor clients. It is a huge stride forward for the magnet metal production complex, a forerunner in the Humber Freeport development. The company is also in early discussions with the UK Infrastructure Bank and other potential equity partners for the balance of the funding, around $100 million (£82.4m). As reported, a government grant of £4 million has been received.

It was revealed in Pensana’s latest update on financing for both the East Yorkshire operation, and the establishment of mining operations in Angola, where key steps have also been taken at the start of the supply chain that will lead to electric vehicle and wind turbine manufacturing. The projects are being financed independently, it told City investors in the London-listed entity.

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In Africa, a modular redesign has successfully been completed for the Longonjo facility. A total cost of $200 million (£164.7m) is anticipated. ABSA, formerly the Amalgamated Banks of South Africa until 2005 and Barclays Africa Group Limited until 2018, has been mandated as the lead arranger for a $120 million loan facility, and has provided high level commercial debt terms which include South African export credit agency support.

Angola’s sovereign wealth fund, FSDEA, and a pan-African multilateral development financial institution are working to provide the $80 million equity investment required to support the debt facility. FSDEA has provided a $15 million bridging loan facility towards the investment, and it has been made available to meet cash flow requirements to facilitate early-stage development and the route to main finance.

Paul Atherley, Pensana chair, said: “The completion of the engineering redesign together with the technical and economic sign off by The Mineral Corporation during November is a very important step towards the execution of the financing.

“We are grateful for the ongoing support from FSDEA which is working closely with us and the team at ABSA to secure the funding to allow the commencement of construction at Longonjo in the first quarter of next year.

“We have been pleased with the strong interest in the high value radionuclide-free MREC product from Longonjo and are advancing a number of offtake agreements as part of the financing.

“We continue to progress the financing for the Saltend project which will be independent of the Longonjo financing and as previously advised will be a bond finance, however now with support from the UK Government.”

ABG had been appointed to lead the financing of the plant in August 2021, when an initial lease was signed with PX Group and ABP. It has since switched plots to one directly off the A1033.

Shares were up 30 per cent, from 25.9p to 33.9p, in the day’s trading.