The bankable feasibility study on Australian Mines’ Sconi cobalt-nickel-scandium project in Queensland, Australia, has shown a three open pit, 2 Mt/y operation can be built for some $974 million.

For this investment, the company anticipates producing some 8,496 t/y of cobalt sulphate, 53,301 t/y of nickel sulphate and 89 t/y of scandium oxide over the 18-year mine life, generating a post-tax internal rate of return of 15%.

The 2 Mt/y processing plant is by far the biggest capital expense, coming in at $730 million. This will be based at the Greenvale site where the mining operation will also be centred.

The company then anticipates mining a separate open pit at Lucknow, 10 km to the southeast of Greenvale, with Greenvale and Lucknow being treated as a single-fleet mining area. The Kokomo open pit, 60 km to the north-northeast of Greenvale, will be operated with a separate mining fleet with ore to be hauled to the processing plant by road trains. Mining is expected to be carried out by contractor.

Total C1 cash costs for the Sconi production have come in at $0.48/Ib ($1,058/t) nickel (post cobalt and scandium credits). Given the near-surface nature of the laterite mineralisation at Sconi, the mining schedule encompasses a short pre-strip period of just three months, followed by around 12.5 years of mining operations, with a peak mining rate of up to 6 Mt/y, and then a further five years of stockpile processing operations.

The flowsheet includes a mix of crushing and grinding, high pressure acid leach, pressure oxidation leach and solvent extraction to produce the three separate products (scandium oxide, cobalt sulphate and nickel sulphate).

In February, Australian Mines signed an offtake agreement term sheet with SK Innovation (a subsidiary of SK Holdings, one of South Korea’s largest companies) for 100% of the expected cobalt sulphate and nickel sulphate production from the Sconi project for an initial period of seven years, with an option exercisable by SK Innovation to extend this commodity supply agreement for a further six years. SK will use the cobalt and nickel sulphate to supply their global electric vehicle battery manufacturing plants.

While the BFS anticipates only around 10% of scandium oxide produced being sold, the company is currently working with Metalysis and leading academic researchers at the Amrita Centre for Research and Development in India to develop new markets for the metal.

The next step for the company is securing the funds to complete development of Sconi, which Australian Mines envisages being wrapped up next year before mining and construction starts in 2020.