Industrials and materials projects are financed against commodity cash flows, where price, volume and input cost move independently and the capital structure often has to account for equity contributed years before the debt process begins. Zenith builds phased project finance models for processing and production facilities — capacity build-up, debt sizing and sculpting, and commodity scenario analysis run as a matrix.
Brownfield revivals and staged expansions frequently involve a sponsor who has already funded an acquisition or an earlier phase from equity. When the debt process starts, the ratio arithmetic gets applied to the remaining capex in isolation — producing an equity requirement that ignores what has already been contributed.
On a project where a sponsor had funded a USD 187m acquisition entirely from equity against a USD 553m total project cost, the project was already 33.8% equity — over-equitised against its own 70/30 target — while the model was calling for another USD 151.65m. Nobody had asked the lenders to treat the prior contribution as qualifying sponsor equity. Reframing that question was worth more than any point of margin.
Testing tin price, concentrate availability and recovery rate one at a time produces three answers, none of which describes the actual downside. The variables correlate — availability tightens when prices rise, recovery falls when feed quality drops — and the combinations that break the covenant are usually not the ones a single-variable sensitivity finds.
The same applies to steel: input cost, output price and utilisation have to be tested together, and the output of that work is a named breaking point rather than a range.
Most sponsors discover which assumptions they can't defend during lender diligence, when the cost of that discovery includes momentum, credibility and often the process itself.
Smelting economics are the clearest illustration: the model lives on concentrate supply and treatment charges, two variables that move independently and are frequently modelled as if they don't. A model assuming stable feedstock at a stable TC/RC isn't a bankable model — it's a brochure, and it will be identified as one in the first technical review.
Corporate and asset-backed lines for producers with contracted offtake. Lenders size against the offtake counterparty and the cost curve, so both go into the pack before outreach opens.
Acquisition and growth debt for producers whose earnings profile is too cyclical for a bank credit box. The negotiation that matters is covenant headroom, not the covenant list.
Plant and processing facilities financed on offtake and cost-curve position, with commodity scenarios run as a matrix rather than one variable at a time.
Costing, working-capital discipline and a driver-based model that ties volume, price and input cost together — the three things a credit committee will move against you.
EBITDA bridges that hold up through a commodity cycle, add-backs a buyer will accept, and a working-capital peg negotiated on evidence rather than assertion.
Commercial and operational ownership through a scale-up or a post-acquisition integration, where the plan exists and the execution capacity does not.
Getting credit for equity already in the ground: capex spent, plant commissioned and contracts signed, presented as de-risking rather than as sunk cost.
USD 553,000,000
total project cost
Restructuring the funding plan for a three-phase integrated steel build
Phased project finance — senior, subordinated, mezzanine and vendor debt against a brownfield revival and capacity expansion to 1.84 MTPA
A pre-bankability model and funding framework for a greenfield tin smelter
Project finance model and funding framework for a greenfield tin smelting facility
Consolidating a cross-jurisdiction group ahead of a pilot plant equity raise
Equity raise financial model and group financial preparation for a pilot coated spherical graphite processing plant with associated upstream mining operations
Each phase is sized against the commodity cash flows it will generate, with debt sculpted to DSCR and capacity build-up modelled explicitly rather than assumed linear. Where a sponsor has funded an earlier phase or acquisition from equity before the debt process starts, that prior contribution needs to be credited against the sponsor ratio, or the remaining capex arithmetic overstates the equity still required.
It should, but lenders will not apply it automatically — the sponsor has to make the case explicitly. On one project, a sponsor had funded a USD 187m acquisition entirely from equity against a USD 553m total cost, already 33.8% equity against a 70/30 target, yet the model was calling for a further USD 151.65m because nobody had asked lenders to treat the prior contribution as qualifying sponsor equity.
As a matrix, not a set of single-variable sensitivities. Price, volume and input cost move independently and often correlate — availability tightens as prices rise, recovery falls as feed quality drops — so testing them one at a time misses the combinations that actually break the covenant. The output lenders want is a named breaking point, not a range of isolated outcomes.
A model built and stress-tested to the standard a lender's technical and credit teams will apply, before the sponsor takes it to market — commodity scenarios run as a matrix, debt sized and sculpted against DSCR, and every material assumption defensible under scrutiny. Doing this work beforehand is materially cheaper than having an indefensible assumption identified during lender diligence, which costs momentum and credibility.
Smelter economics live on concentrate supply and treatment or refining charges, two variables that move independently of each other and of output price. A model assuming stable feedstock at a stable TC/RC understates downside risk and will be flagged in the first technical review. Debt capacity has to be sized against scenarios where feedstock and TC/RC move against the borrower simultaneously, not just against the base case.
Last reviewed August 2026
Tell us the transaction and the timetable. If it is not something we should run, we will say so.
