Cobalt Blue Holdings Ltd (ASX:COB, OTC:CBBHF) is making strong progress with its integrated Australian cobalt supply strategy with work at present focusing on a Refinery Development Program and a definitive feasibility study (DFS) for the Broken Hill Cobalt Project (BHCP) utilising results from a Demonstration Plant.
The strategy incorporates a refinery at Kwinana in Western Australia at which cobalt sulphate will be produced for export utilising the cobalt MHP from the BHCP in Broken Hill, Far West New South Wales.
This comes at a time of increased focus in the US and Europe on developing critical minerals supply chains to serve the burgeoning electric vehicle and clean, green energy sectors.
In this Q&A with Proactive, Cobalt Blue’s investor relations/commercial manager Joel Crane outlines components of the company’s strategy.
Please remind us why you are building a cobalt refinery in Kwinana?
There are several strategic reasons to build out west. The primary factor is the location and facilities Kwinana boasts, namely its deepwater port with world-class export facilities that give us access to international markets.
But also, because cobalt sulphate is a delicate product that is expensive to ship across land and store. Producing in a port’s backyard reduces typical operating costs.
The other cost advantage is that Kwinana is a major chemical district in Australia and around 70% of the conversion costs from cobalt-rich MHP to sulphate are reagents. We’ll have access to local, low-cost chemicals.
Also don’t forget the relatively close proximity to several nickel operations that produce cobalt as a by-product who are looking to place their material into the downstream battery supply chain.
MHP produced at the Demonstration Plant after it has been dried.
What do you hope to get out of the Refinery Development Program?
There are actually a number of benefits of testing third-party raw materials now. In the first instance, we’ll be able to evaluate the suitability of Australian and international feedstocks.
On the back of these assessments, we will have a basis for negotiations and ultimately believe we’ll be able to complete commercial arrangements with partners.
And from a technical perspective, our operations team will be able to improve procedures and strategies ahead of construction of the commercial plants.
The direct result of these outcomes is a significant de-risking of both the refinery in Kwinana and perhaps more importantly, the cobalt operation in Broken Hill.
Nickel and cobalt sulphate.
Sulphur is proposed to be a by-product from the Broken Hill Cobalt Project. Can you brief us on the strategy of your primary by-product?
Yes, we will be producing around 300,000 tonnes of elemental sulphur per year as a by-product.
Because of the makeup of the resource, which is 7-8% sulphur, our flowsheet requires processing of pyrite concentrate in a kiln to convert pyrite into pyrrhotite and elemental sulphur.
The sulphur is condensed from the kiln off-gas and converted into solid prills which is how elemental sulphur is traded and transported in the international markets.
There is no local elemental sulphur producer in Australia, so we import around 1 million tonnes of it per year, primarily for the fertilizer industry.
Cobalt Blue will become the first domestic producer of elemental sulphur, with the potential to displace up to one-third of current national imports.
We already have a relationship with Mitsubishi which trades a significant share of sulphur in the Asian region.
The images in last week’s ASX release show the recently installed sulphur collection tank in the kiln system and a stack of around one tonne of clean sulphur. The operations team has been very excited with the volume and quality of what has been produced.
Sulphur produced at the Broken Hill Demonstration Plant.
The Albanese and Biden governments recently signed a pact to cooperate on critical minerals, how will this impact Cobalt Blue?
Our cobalt products were already fitting in nicely with the Allied battery material supply chain that the US IRA and EU CRMA have created over the past year.
But this so-called Climate, Critical Minerals and Clean Energy Compact will treat Australian projects and operations in a similar way to North American-based projects in that we will qualify for equity and debt funding from American companies and the Government.
Although this agreement has not yet been passed by the US Congress, our contacts in Austrade believe it will be put forth in November and has a very good chance of getting through.
Congratulations on your recent successes, what do the next four months hold for the team at Cobalt Blue?
At the moment we are full steam ahead on the definitive feasibility study (DFS). The operations team will complete the final runs at the Demonstration Plant in Broken Hill that provides the engineering data for the study.
Meanwhile, our DFS partner consultants (Worley, GHD and SRK) will finalise their respective segments of the study. And the corporate team has a very busy diary ahead of the DFS release in Q4 with negotiations with commercial partners as well as high-level discussions with Australian, Japanese, US and other international funding agencies.
Online webinar
Cobalt Blue will host a live online webinar with CEO Joe Kaderavek, executive manager Andrew Tong and investor relations/commercial manager Joel Crane on Thursday, August 10, 2023, at 1pm AEST.
In the webinar, the team will provide an update on the Demonstration Plant and outline details of the recently launched Refinery Development Program.
The presentation will be followed by a Q&A session and the overall program is scheduled to run for 45 minutes.
Please register in advance for this free webinar - https://us06web.zoom.us/webinar/register/WN_niUNBHKLR_i5MgLHGq7xgw