Lithium developer Anson secures $193m business incentive from Utah gov
Anson Resources has announced that the Utah Inland Port Authority (UIPA) board has approved a business incentive of $193-million to support the development of Anson's Green River lithium project.
The calculation of the business incentive, which has been granted to Anson’s US subsidiary, A1 Lithium, is based on a projection of additional property tax that UIPA expects to receive over the life of the project, with the incentive due to be provided to Anson as a tax rebate during the operation of Green River over 20 years – about $8-million a year.
UIPA also provide an alternative arrangement, based upon the incentive amount, to support bonds that can be drawn against to finance “public infrastructure” to support the development of the project.
Public infrastructure can include utility extensions, including power, water and gas, as well as rail and road upgrades or extensions, and is subject to agreement from the local authorities as well as the UIPA board. A combination of both options is also possible.
Anson has entered discussions with the UIPA to investigate these alternative financing structures as utility and transportation infrastructure upgrades and extensions are required as part of the development of the planned 10 000 t/y lithium carbonate production plant at Green River, which based upon the scoping study completed in March is expected to require a total capital investment of $569-million.
Any increases in production will also require further investment in supporting utilities and transportation extensions and upgrades.
Notably, the discussions with the UIPA do not influence the UIPA board approval or any other discussions with Utah government agencies about other forms of support including that with the Governor’s Office of Economic Development (GOED). Anson’s application to GOED to consider tax reduction for Green River is expected to be considered at its next board meeting to be held on September 10.
Anson chairperson and CEO Bruce Richardson says while it is a complicated structure, the approval of the business incentive to Anson is an important step forward in putting the finance stack together for the carbonate plant at Green River. “We are working on several finance options that limit dilution for shareholders. We continue to work on pre-production finance stacks as well as options to improve the projected financial returns that also will support debt and strategic investment financing,” he confirms.