Highfield Resources (ASX:HFR) announced on Monday (August 18) that China Minmetals and its subsidiary Qinghai Salt Lake have decided not to proceed with the proposed strategic transaction amounting to approximately US$300 million equity subscription in Highfield.
First announced on May 13 2025, the transaction was a non-binding letter of intent amended on July 18 with an extension of the exclusivity period for Qinghai to complete its due diligence.
Under the proposed investment, a combination of direct equity investment and existing convertible notes held by key financiers will be converted. Highfield previously issued notes to Potash (Muga) Investment, Singapore-based EMR Capital and other cornerstone investors.
It was noted that EMR “reserves all of its rights under the convertible notes,” constructively engaging with Highfield regarding future opportunities.
A shareholder call was held a day after the announcement, with Highfield saying that “evolving market conditions and challenges in finalizing mutually acceptable commercial terms” are what drove the cancellation.
Both China Minmetals and QSL were able to finalise initial technical assessments, but have not yet set project valuation and implementation timelines.
“(We remain) committed to the strategic objectives that have underpinned recent transaction discussions, with a focus on delivering long-term value to shareholders,” Highfield said in the August 18 release.
The Muga potash project is Highfield’s flagship asset. According to Navarra President Maria Chivite, the project is the largest in Spain, covering about 46 square kilometres in the provinces of Navarra and Aragón in Northern Spain.
“It should be noted that the promotion of this project will mean the creation of 800 jobs, an industrial development that has the participation of important international investors,” Chivite underlined.
Highfield is currently focused on preparing to begin construction at Muga, with Yankuang Energy Group among its strategic investors.
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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.
