Pacific Lime and Cement has shifted its Central Lime Project from civil construction to equipment installation, with more than half of its major kiln and process plant materials now delivered. The A$129 million project forecast remains within its A$133 million funding envelope, but A$26 million of contingent funding is still undrawn or unrealised.
- First major equipment shipment arrived at Port Kido after quarter end
- First lime production targeted between late Q1 and Q2 CY2027
- PNG Government invested US$16.3 million for a 13% project interest
- Central Lime forecast cost sits A$4 million below funding envelope
- Central Cement preferred tenderer targeted by 18 December 2026
Central Lime shifts from civil works to equipment installation
Pacific Lime and Cement Limited (ASX:PLA; PNGX: PLC) has reached the most tangible phase of its Central Lime Project, moving from heavy civil construction towards the arrival and erection of production equipment. Engineering for the kiln and process plant is complete, off-site fabrication had reached 95.6% by 13 October, and the first major shipment arrived at Port Kido on 19 October carrying more than half of the equipment and materials required for two 600-tonne-per-day quicklime lines.
The first shipment included kiln shell sections, structural steel, mechanical equipment and associated plant components. Equipment erection is expected to begin in early November, around one month later than reported in the June quarter. Pacific Lime continues to target first lime from Kiln 1 between the end of the first quarter and the second quarter of calendar 2027, with both kilns scheduled for completion in the second quarter.
Project cost remains within a narrow funding envelope
At 30 September, direct works including civil construction, roads, wharf and site facilities were 59.3% complete, while Phase 3 of the wharf extension stood at 48.9%. The company forecasts a final Central Lime cost of A$129 million against a base-plus-contingent funding framework of about A$133 million. That leaves only A$4 million of headroom, although Pacific Lime says much of the remaining A$57 million of forecast expenditure relates to fixed-price engineering, procurement and construction works.
Cost pressure has come principally from international shipping, freight and logistics, with the company also citing regional complexities partly associated with developments in the Middle East. Pacific Lime says international shipping and site earthworks, two significant sources of earlier cost variation, are now substantially complete. Even so, the remaining funding cushion depends on the timing of a proposed A$10 million working capital facility and the eventual realisation of the company’s roughly 16% Adyton Resources shareholding, valued in the report at about A$16 million.
PNG Government equity eases near-term funding pressure
The PNG Government’s investment has now moved from agreement to cash. Through Kumul Minerals Holdings, it paid US$16.3 million, reported as A$22.6 million in the quarter, for a 13% interest in the Central Lime Project company. The transaction was first announced in the company’s PNG Government equity investment and includes an option for a further 5% interest after operations begin.
Pacific Lime ended the quarter with A$16.4 million in cash after using A$5.1 million in operating activities and A$30.5 million on exploration, evaluation and development, predominantly Central Lime construction. It also drew A$13 million under an unsecured loan facility. The Appendix 5B calculation shows just 0.46 quarters of funding on cash and relevant outgoings alone, a stark measure of the company’s dependence on identified but not yet fully realised funding sources. Management says operating outflows should fall in the December quarter, while project spending is expected to remain elevated as equipment is delivered and erected.
Central Cement tender reaches final competitive stage
The Central Cement Project is also approaching a decision point. Four international engineering, procurement and construction offers were received for two 2,500-tonne-per-day integrated clinker and cement plants and an associated power plant. Holtec has completed its technical and economic review in line with International Finance Corporation requirements, building on the IFC cement advisory partnership formed to support the project.
Two highest-ranked bidders will now enter clarification, negotiation and best-and-final-offer stages. Board approval of a preferred tenderer is targeted by 18 December, with the contract price and financing arrangements to be announced once finalised. A final investment decision remains targeted for the first quarter of calendar 2027, subject to project funding and Board approval, while production is targeted for the first quarter of calendar 2029.
Port approval adds infrastructure value but not certainty
After quarter end, Papua New Guinea’s Conservation and Environment Protection Authority approved an environmental permit amendment for the Phase 4 Marine Terminal Expansion, including an international wharf and breakwater. Pacific Lime has also completed strategic planning for the roughly 4,500-hectare Kido/Rearea Special Economic Zone and its multi-berth port, with lime and cement designated as anchor industries.
The company says third-party tenants and investors are expected to provide much of the capital for wider precinct development, while discussions with development finance institutions and prospective industrial partners continue. Those discussions remain non-binding. The immediate test is less the ambition of the precinct than whether Pacific Lime can convert the remaining funding sources into cash while keeping Central Lime on schedule and below its already tight cost ceiling.
Bottom Line?
The construction milestone is meaningful, but the next phase will test whether equipment erection, wharf completion and contingent funding can move in step through early 2027.
Questions in the middle?
- Will the second equipment shipment and kiln erection proceed on the timetable required for first lime production?
- How quickly can Pacific Lime draw the proposed working capital facility or realise its Adyton stake?
- What EPC price, financing package and equity structure will emerge from the Central Cement tender?