Cobalt Blue Holdings Ltd (ASX:COB, OTC:CBBHF) is making strong progress with a definitive feasibility study (DFS) for an integrated Australian cobalt supply chain incorporating the Broken Hill Cobalt Project (BHCP) in New South Wales and a refinery in Kwinana, Western Australia.
The first part of this strategy involves taking cobalt from the mine and processing it into a Mixed Hydroxide Precipitate (MHP) at Broken Hill with the second part transforming the MHP into cobalt sulphate at a refinery in Kwinana.
Increasing interest
COB is taking steps to advance both buoyed by interest and support by governments, potential private partners and increasing demand for cobalt which is easing the supply/demand imbalance.
This imbalance is expected to ease from next year as demand growth overtakes output for a sustained period with prices back toward long-term averages.
Also supporting the company’s integrated cobalt supply strategy is Australia’s key role in the emerging global push for an Allied Critical Minerals Supply Chain, enhanced by the Inflation Reduction Act (IRA) in the US and the Critical Raw Materials Act (CRMA) in the EU.
“Positive steps”
Chief executive officer Joe Kaderavek said: “Our journey continues via positive steps. Both BHCP and Kwinana Refinery Project strategies are attracting substantial interest from Federal and state governments as well as numerous major industry players.
"We believe the evolution of an Allied Critical Materials Supply Chain further enhances the attractiveness of our cobalt projects.”
DFS in Q4
COB is managing the delivery of the BHCP DFS with three engineering firms contracted to provide design and costings as follows:
- Worley is completing process plant design and review of the COB test work program (inclusive of the Demonstration Plant).
- GHD is designing the non-process plant infrastructure and tailings/mine waste management (co-disposal in integrated waste landforms). GHD is also preparing the EIS and associated permit applications.
- SRK is preparing the resource and reserve statements, based on the resource block model and mining studies.
Demonstration Plant
The Demonstration Plant in Broken Hill is playing a key role in the DFS with recent activities focused on processing larger volumes of concentrate through to the MHP circuit with nickel/cobalt sulphate samples produced.
This plant allows technical staff to monitor and de-risk operations and scaling of the COB process, targeting operations in large commercial volumes and among the improvement studies being undertaken are those involving the kiln circuit and the leach circuit.
The off gas from the kiln contains elemental sulphur and calcine dust with a ceramic element filter installed to reduce the dust carry-over into the sulphur product. The filter is being trialled to assess performance at higher throughput rates.
Performance-based data including materials of construction, operability, functionality (efficiency of dust removal from sulphur stream) and maintenance cycles are being collated and factored into DFS engineering.
A sulphur condenser has been installed and is progressing through commissioning to aid in the recovery of sulphur and de-bottleneck operations by providing a continuous outlet for molten sulphur from the plant.
For the leach circuit an autoclave circuit was built as a series of stirred tanks, as opposed to a single ‘cigar’ vessel. This has been essential to providing the opportunity to readily adjust circuit volume, evaluate heat management per reactor and modify agitation appropriate to each reactor duty.
In recent months configurations have included testing total volumes of up to 450 L in four reactors, implementing process control via the Honeywell (NYSE:NASDAQ:HON) control system for heat management and testing multiple agitator designs to minimise wear and maximise solids suspension.
Also, operations have focused on processing feed material at different particle size ranges.
Permitting progress
An Environmental Impact Statement is progressing with the mining and infrastructure footprint determined to ensure that all disturbance aspects of the BHCP are assessed.
Ecology, Aboriginal heritage and soils surveys of the maximum disturbance footprint have been completed.
As part of the EIS process, comprehensive groundwater baseline data is being collected from a series of historical and new piezometers.
Continuing support
COB is encouraged by continuing government support exemplified by the awarding of a grant of up to $15 million through the Critical Minerals Accelerator Initiative (CMAI) for the BHCP by the Australian Government.
The company received the initial grant instalment of $1.5 million in December 2022 and expects to receive the next grant instalment of $6 million this month.
Also providing encouragement is Australia’s role in the emerging Allied Critical Materials Supply Chain as the IRA and CRMA impact the global critical minerals supply chain by incentivising Allied Nation supply.
These are strict requirements over geographic sourcing of raw materials that have prompted change in strategic and investment patterns among global EV and battery makers.
The recent compact between the US and Australia advances the prospects for Australian critical minerals projects with greater availability of grants, loans, rebates, incentives and investments.
READ: Cobalt Blue progresses three key building blocks in integrated cobalt supply strategy
Another key component of COB’s integrated cobalt strategy is the proposed refinery in Kwinana.
A concept study has identified approximately A$70 million in pre-production capital required to fund the building of a 3,000 tonnes per annum refinery.
These estimates will be updated as part of the upcoming integrated BHCP DFS delivery later in the year.
Cobalt Blue Sulphate Refinery and NCM Precursor strategies
Potential Kwinana partner
COB is engaged with a potential partner that owns a suitable property in the Kwinana district where it expects to commence refinery construction next year.
The potential partner, a leading Japanese multinational that specialises in the production and trading of commodities, is further determining an appropriate level of equity ownership in the Kwinana Refinery Project via a funding contribution.
A single, larger refinery allows COB to process future material sourced from BHCP and (in future) other cobalt projects, rather than build out individual refineries at mine sites throughout Australia.
Cobalt Blue Sulphate Refinery – multiple feedstock sourcing.
COB is targeting commencing Kwinana Refinery Project operations in 2025, likely before the BHCP begins full-scale operations in 2026, and is evaluating multiple options for feedstock for the refinery project.
The company is targeting an existing Kwinana footprint that will lower site/construction costs as well as equipment delivery costs (vs building the refinery in Broken Hill).
It is also COB’s expectation that transporting MHP to WA will likely reduce operating costs.
The initial strategy was to refine MHP to sulphate in Broken Hill and transport sulphate to port. The cost of transporting MHP to Kwinana is less than that of sulphate given sulphate’s delicate nature.
Furthermore, refining costs are expected to be lower than initially planned due to the availability of reagents and chemicals in the Kwinana district.
Estimated development schedule.
Management team additions
Two key hires have recently been made that validate COB’s commitment to its business strategy.
Jan Fuchter has been appointed project finance manager and Helen Degeling project acquisition manager.
Fuchter has more than 20 years of financing experience in various regions including the project financing of mining projects in Africa, Asia and Latin America. He also played a leading role in several recent financings of Australian critical minerals projects.
In previous roles at Export Finance Australia and investments and institutional banks, he originated and executed project finance transactions globally.
He has worked with a diverse range of stakeholders in multiple countries on the finance and development of projects, including several notable project financings in the metals and mining sector.
In his role with COB, Fuchter will lead the company through the multifaceted avenues of mining project finance both domestically and internationally.
Degeling is a PhD qualified geologist with more than 18 years of experience in industry, academia and government.
She has worked as an exploration geologist and exploration manager in gold and base metals throughout Western Australia, New South Wales and Queensland, as well as consulting to a variety of mineral explorers and producers domestically and abroad.
As the former director, Minerals Geoscience for the Geological Survey of Queensland, she initiated the Queensland Government’s Circular Economy, Secondary Prospectivity, traceability and Sustainable REE processing programs.
Degeling is a passionate advocate for the growth and evolution of the minerals sector in line with the demands of a just transition towards decarbonisation and adoption of ESG standards globally.
In her role with COB, she aims to realise the opportunities for green metal extraction from mine waste to support the energy transition.