Cobalt Blue Holdings Ltd (ASX:COB, OTC:CBBHF) continues to attract attention with its integrated cobalt supply strategy aimed at servicing future global demand for the critical metal from its planned mine and value-adding projects in Australia.
While work continues on a definitive feasibility study for the Broken Hill Cobalt Project (BHCP) at Broken Hill in Far West New South Wales, the company is also progressing with a plan to establish a refinery at Kwinana in Western Australia.
READ: Cobalt Blue expects to finalise DFS for integrated cobalt supply chain by year-end
This proposed plant will transform COB’s Mixed Hydroxide Precipitate (MHP) from Broken Hill into cobalt sulphate for export to the emerging battery markets in Europe and the US.
Giving the Kwinana Refinery Project plan a major boost has been the recent execution of a non-binding agreement with a potential partner, a leading Japanese multinational company that specialises in the production and trading of commodities.
Cobalt Blue’s progress to date and its future plans were outlined to a responsive audience at the recent 2023 World Cobalt Congress.
In this Q&A, the company’s chief executive officer Joe Kaderavek outlines COB’s progress to Proactive.
What are the key takeaways from your attendance at the 2023 World Cobalt Congress?
Participants see the oversupplied cobalt spot market as unsustainable and expect a tighter market. It’s just a matter of time. Other observations include:
- Automotive OEMs continue to base the large majority of their vehicle portfolios on cobalt-based cathodes.
- EU and US legislation is leading to a premium cobalt market for qualifying products. This could eventually lead to a separate price index. Both supply and demand side participants expressed this view.
- The effects of the US legislation (IRA Act) are starting to be felt, with LG Energy Solutions recording quarterly profit boosted by an additional US$80 million due to IRA credits. These credits will be increasingly harder to source as compliance tightens every year.
- COB showcased its Kwinana Refinery Project, with the response both immediate and positive. Producers, traders and customers all expressing interest. The cobalt market needs more Western processing capability.
I believe a standalone refinery is a smart move. It reduces operating costs (access to lower-cost reagents + larger scale benefits), allows COB to enter the production chain earlier and unashamedly targets the most generous financial assistance in cobalt market history.
These benefits are available for a limited 10-year window and the time for action is now.
The refinery is not a higher priority than developing BHCP, rather it’s a standalone business that will process BHCP material when it comes online.
Both feasibility studies are due at the same time (Q4 23). However, the refinery is a more modest capital cost (estimated A$70 million) and a shorter construction period, allowing for expected first production earlier.
Cobalt Blue Sulphate Refinery – multiple feedstock sourcing.
The refinery is planned to be developed in three stages: (1) 3,000 tonnes per annum (tpa) - third-party refining; (2) 4,500tpa – BHCP integration; and (3) further extension to accommodate future Cobalt in Waste Streams Projects
The June 5 ASX announcement mentions a potential partner for the Refinery Project – can you elaborate?
COB has now executed a non-binding agreement with a potential partner. Our potential partner:
- is a leading Japanese multinational that specialises in the production and trading of commodities;
- has a global presence with subsidiaries and affiliates in several countries;
- has a large trading arm seeking to supply its Japanese partners in major global Electric Vehicle markets, including the United States; and
- owns a suitable property in the Kwinana district that would support the operation of the cobalt/nickel refinery project. Partnering with an existing property owner would substantially reduce development time for the Refinery Project. The company is currently determining an appropriate level of equity ownership in the Refinery Project via a funding contribution.
Recent activities focused on processing larger volumes of concentrate through the Mixed Hydroxide Precipitate (MHP) circuit. Nickel/cobalt sulphate samples continue to be produced. At this last stage of Demonstration Plant operations, we are targeting scale and continuous operations. We expect to update the market over the next few weeks as we hit the remaining targets.
Pressure oxidation leach circuit at the Demonstration Plant in Broken Hill.
We have 35 BHCP employees trained to operate/maintain the Demonstration Plant and the COB process, and we expect to keep a core of these people in commercial operations.
Some of these staff members have been trained in MHP to cobalt sulphate refining over the last three years. This corporate knowledge will assist the commissioning and operations of the future BHCP (mine) and Kwinana Refinery.
You recently added some senior hires to the Cobalt Blue Team – talk us through the reasons
As we deliver the BHCP Feasibility Study, we are speaking with the Australian Government concerning their potential financial assistance. To this end, we hired a project finance manager in Jan Fuchter.
Jan has more than 20 years 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 his previous roles at Export Finance Australia and investments and institutional banks, he originated and executed project finance transactions globally.
Our Cobalt in Waste Streams business has been resourced with a full-time hire, one that can also seek out primary resources opportunities. To this end, we hired a project acquisition manager in Dr Helen Degeling
Helen 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 both 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.