Three major Chinese companies — Yankuang Energy Group, Beijing Energy International Holding, and Singapore Taizhong Global Development — have agreed to invest €200 million in Highfield, a Spanish-Australian mining company. According to El Pais, the funding will support the construction of Highfield’s potash mine in Navarra, which is set to become Spain's largest mining project.
The mine, crucial for the production of fertilizers, has gained greater importance due to global fertilizer shortages triggered by the Ukraine war. The mine’s development, however, still requires final approval from Spain’s Council of Ministers.
Highfield, a unique entity, operates from Pamplona and is led by CEO Ignacio Salazar, a Spaniard with extensive experience in the mining and energy sectors. While headquartered in Spain, the company is listed on the Australian stock exchange, with a market value of approximately €100 million. Highfield owns 250 square kilometers of land between Navarra and Zaragoza, where it plans to build the large potash mine, which has already received the necessary authorizations from both the Aragon and Navarra governments.
Expected to operate for 30 years, the mine is projected to produce one million tons of potash annually, with an estimated EBITDA of €340 million. The total investment required to complete the project is €800 million, according to the company. Highfield has promoted the mine as a “low-cost” and "low-investment" infrastructure.
The first phase of the project will be fully financed through the €200 million investment from the three Chinese companies. Yankuang Energy Group, a major Chinese mining company specializing in coal production and listed on the Shanghai and Hong Kong stock exchanges, is leading the deal. Yankuang will invest about €80 million and will become the largest shareholder in the Spanish company overseeing the project. As part of the agreement, Yankuang will appoint the majority of the board members, including the president. Additionally, Yankuang plans to sell a Canadian mining project, valued at €256 million, to Highfield, which is still in its developmental stages.
The other two investors are Beijing Energy, which is contributing around €45 million, and Singapore Taizhong Global Development, investing €27 million. Beijing Energy is a major player in the renewable energy sector, while Taizhong specializes in the wholesale trade of raw materials. Highfield is also negotiating with a potential fourth investor to secure additional funds.
With this capital injection, Highfield believes it has secured enough financing to initiate the first phase of the project, which requires approximately €450 million. The remaining funds will be sourced through loans. Highfield has arranged €321 million in project financing from prominent banks including BNP Paribas, Société Générale, Natixis, ING, and HSBC.
However, the deal is still subject to regulatory approval, with the most critical being the authorization from the Council of Ministers. This approval is necessary due to Spain’s regulations that safeguard strategic sectors, as potash production is vital for fertilizer manufacturing. Currently, 40% of the world's potash is produced in Russia and Belarus, and the ongoing war in Ukraine has severely disrupted the supply chain, leading to increased prices and contributing to inflation across Europe.
This project aligns with Europe’s broader goal of enhancing strategic autonomy in key sectors like mineral production. However, concerns remain in both Brussels and Madrid about the growing involvement of Chinese companies, which are often backed by the Chinese state, in strategic European industries. The final decision will rest with the Spanish government, and the project is not expected to be fully operational until 2025.
