Tag Archives: cobalt

Panoramic looks to Barminco for Savannah nickel-copper-cobalt ramp up

Perenti’s hard-rock underground mining subsidiary, Barminco, has been selected as the preferred contractor by Panoramic Resources at its Savannah nickel-copper-cobalt project in the Kimberley region of Western Australia.

The contract, worth around A$200 million ($135 million), will see Barminco carry out mine development, production, and haulage over a three-year term. Work is expected to commence in March 2020.

Barminco anticipates it will employ around 170 people for the project and use predominately new equipment, which has been included in the capital guidance previously provided, to deliver the project.

Savannah, 110 km north of Halls Creek in Western Australia, saw mining operations recommence in December 2018, with the first shipment of concentrate departing Wyndham in February 2019. The miner is currently developing the higher-grade Savannah North orebody focusing on high speed development and a ramp up to full production in 2020, Perenti said.

Perenti Managing Director, Mark Norwell, said: “This project demonstrates our ability to capture organic growth opportunities, with the Barminco business now well integrated into the Perenti group whilst further embedding itself as a leader in underground mining.”

Underground Chief Executive Officer, Paul Muller, added: “We look forward to working closely with Panoramic Resources in driving the development of the Savannah North orebody safely and efficiently as it ramps up to full production.”

Miners need to do more in climate change, decarbonisation battle, McKinsey says

A report from consultancy McKinsey has raised concerns about the mining industry’s climate change and decarbonisation strategy, arguing it may not go far enough in reducing emissions in the face of pressure from governments, investors, and activists.

The report, Climate risk and decarbonization: What every mining CEO needs to know, from Lindsay Delevingne, Will Glazener, Liesbet Grégoir, and Kimberly Henderson, explains that extreme weather – tied to the potential effects of climate change – is already disrupting mining operations globally.

“Under the 2015 Paris Agreement, 195 countries pledged to limit global warming to well below 2.0°C, and ideally not more than 1.5°C above preindustrial levels,” the authors said. “That target, if pursued, would manifest in decarbonisation across industries, creating major shifts in commodity demand for the mining industry and likely resulting in declining global mining revenue pools.”

They added: “Mining-portfolio evaluation must now account for potential decarbonisation of other sectors.”

The sector will also face pressure from governments, investors, and society to reduce emissions, according to the authors.

“Mining is currently responsible for 4-7% of greenhouse gas (GHG) emissions globally. Scope 1 and Scope 2 CO2 emissions from the sector (those incurred through mining operations and power consumption, respectively) amount to 1%, and fugitive methane emissions from coal mining are estimated at 3-6%.

“A significant share of global emissions – 28% – would be considered Scope 3 (indirect) emissions, including the combustion of coal.”

While there have been a number of high-profile mining companies making carbon emission pledges in the past 18 months – BHP pledging $400 million of investment in a low carbon plan being one notable example – the authors say the industry has only just begun to set emissions-reduction goals.

“Current targets published by mining companies range from 0-30% by 2030, far below the Paris Agreement goals, which may not be ambitious enough in many cases,” they said.

Through operational efficiency, and electrification and renewable-energy use, mines can theoretically fully decarbonise (excluding fugitive methane), according to the authors, with the disclaimer that building a climate strategy, “won’t be quick or easy”.

Water/heat

Water stress was one area the authors homed in on, saying that climate change is expected to cause more frequent droughts and floods, altering the supply of water to mining sites and disrupting operations.

The authors, using McKinsey’s MineSpans database on copper, gold, iron ore, and zinc, recently ran and analysed a water-stress and flooding scenario to emphasise the incoming problems.

The authors found that 30-50% of the production of these four commodities is concentrated in areas where water stress is already “high”.

“In 2017, these sites accounted for roughly $150 billion in total annual revenues and were clustered into seven water-stress ‘hot spots’ for mining: Central Asia, the Chilean coast, eastern Australia, the Middle East, southern Africa, western Australia, and a large zone in western North America,” the authors said.

The authors continued: “Climate science indicates that these hot spots will worsen in the coming decades. In Chile, 80% of copper production is already located in ‘extremely high’ water-stressed and ‘arid’ areas; by 2040, it will be 100%. In Russia, 40% of the nation’s iron ore production, currently located in ‘high’ water-stressed areas, is likely to move to ‘extreme’ water stress by 2040.”

And, mining regions not accustomed to water stress are projected to become increasingly vulnerable, according to the report.

By 2040, 5% of current gold production likely will shift from ‘low–medium’ water stress to ‘medium–high’; 7% of zinc output could move from ‘medium–high’ to ‘high’ water stress, and 6% of copper production could shift from ‘high’ to ‘extremely high’ water stress.

The authors said: “Depending on the water-intensiveness of the processing approach, such changes, while seemingly minor in percentage terms, could be critical to a mine’s operations or licence to operate.”

Mining executives in these regions are acutely aware of the water issue, according to the authors.

“For instance, Leagold Mining recently shut down its RDM gold mine in Brazil for two months because of drought conditions, even though it had built a dam and a water pipeline,” they said.

Even in areas with low water stress, certain water-intensive mining processes are jeopardised.

“In Germany – not a country known for being vulnerable to drought – a potash miner was forced to close two locations because of severe water shortages in the summer of 2018, losing nearly $2 million a day per site,” they said.

“The frequency and severity of these conditions are expected to increase along with the current climate trajectory.”

To improve resiliency, companies can reduce the water intensity of their mining processes, the authors said. They can also recycle used water and reduce water loss from evaporation, leaks, and waste. Mining companies can, for example, prevent evaporation by putting covers on small and medium dams.

In the long term, more capital-intensive approaches are possible, according to the authors. This could involve new water infrastructure, such as dams and desalination plants. Companies can also rely on so-called “natural capital”, like wetland areas, to improve groundwater drainage.

The authors said: “The option of securing water rights is becoming harder and can take years of engagement because of increased competition for natural resources and tensions between operators and local communities. Basin and regional planning with regulatory and civic groups is an important strategy but cannot alone solve the underlying problem of water stress.”

On the reverse, flooding from extreme rains can also cause operational disruptions, including mine closure, washed-out roads, or unsafe water levels in tailing dams, with flooding affecting some commodities more than others based on their locations.

The authors’ analysis showed iron ore and zinc are the most exposed to ‘extremely high’ flood occurrence, at 50% and 40% of global volume, respectively.

“The problem is expected to get worse, particularly in six ‘wet spots’ likely to experience a 50-60% increase in extreme precipitation this century: northern Australia, South America, and southern Africa during Southern Hemisphere summer, and central and western Africa, India and Southeast Asia, and Indonesia during Southern Hemisphere winter,” the authors said.

Companies can adopt flood-proof mine designs that improve drainage and pumping techniques, the authors said, mentioning the adaptation of roads, or the building of sheeted haul roads, as examples.

Moving to an in-pit crushing and conveying method would also help alleviate potential floods, replacing mine site haulage and haul roads with conveyors.

When it comes to incoming extreme heat in already-hot places – like China, parts of North and West Africa and Australia – the authors noted that worker productivity could fall and cooling costs may rise, in additon to putting workers’ health (and sometimes their lives) at risk.

“Indirect socioeconomic consequences from climate change can also affect the political environment surrounding a mine,” they said.

Shifting commodity demand

Ongoing decarbonisation is likely to have a major impact on coal – “currently about 50% of the global mining market, would be the most obvious victim of such shifts”, the authors said – but it would also affect virgin-ore markets.

“In a 2°C scenario, bauxite, copper, and iron ore will see growth from new decarbonisation technologies offset by increased recycling rates, as a result of the growing circular economy and focus on metal production from recycling versus virgin ore,” they said.

At the other end of the spectrum, niche minerals could experience dramatic growth. As the global electrification of industries continues, electric vehicles and batteries will create growth markets for cobalt, lithium, and nickel.

Emerging technologies such as hydrogen fuel cells and carbon capture would also boost demand for platinum, palladium, and other catalyst materials, while rare earths would be needed for wind-turbine magnets.

The authors said: “Fully replacing revenues from coal will be difficult. Yet many of the world’s biggest mining companies will need to rebalance non-diverse mineral portfolios.

“Many of the largest mining companies derive the bulk of their earnings from one or two commodities. Copper-heavy portfolios may benefit from demand growth due to widespread electrification, for example. And iron ore- and aluminium-heavy portfolios may see an upside from decarbonisation technologies, but they are also more likely to be hit by rising recycling rates.”

According to the authors, the mining industry generates between 1.9 and 5.1 gigatons of CO2-equivalent of annual greenhouse gas (GHG) emissions. Further down the value chain (Scope 3 emissions), the metals industry contributes roughly 4.2 gigatons, mainly through steel and aluminium production.

To stay on track for a global 2°C scenario, all sectors would need to reduce CO2 emissions from 2010 levels by at least 50% by 2050, they said.

To limit warming to 1.5°C, a reduction of at least 85% would likely be needed.

“Mining companies’ published emissions targets tend to be more modest than that, setting low targets, not setting targets beyond the early 2020s, or focusing on emissions intensity rather than absolute numbers,” the authors said.

To estimate decarbonisation potential in mining, the authors started with a baseline of current emissions by fuel source, based on the MineSpans database of mines’ operational characteristics, overlaid with the possible impact of, and constraints on, several mining decarbonisation levers.

The potential for mines varied by commodity, mine type, power source, and grid emissions, among other factors.

“Across the industry, non-coal mines could fully decarbonise by using multiple levers. Some are more economical than others – operational efficiency, for example, can make incremental improvements to the energy intensity of mining production while requiring little capital expenditure,” they said. Moving to renewable sources of electricity is becoming increasingly feasible too, even in off-grid environments, as the cost of battery packs is projected to decline 50% from 2017 to 2030, according to the authors.

“Electrification of mining equipment, such as diesel trucks and gas-consuming appliances, is only starting to become economical. Right now, only 0.5% of mining equipment is fully electric.

“However, in some cases, battery-electric vehicles have a 20% lower total cost of ownership versus traditional internal-combustion-engine vehicles. Newmont, for example, recently started production at its all-electric Borden mine in Ontario, Canada.”

The authors said: “Several big mining companies have installed their own sustainability committees, signalling that mining is joining the wave of corporate sustainability reporting and activity. Reporting emissions and understanding decarbonisation pathways are the first steps toward setting targets and taking action.”

Yet, these actions are currently too modest to reach the 1.5-2°C scenario and may not be keeping up with society’s expectations – “as increasingly voiced by investors seeking disclosures, companies asking their suppliers to decarbonise, and communities advocating for action on environmental issues”.

They concluded: “Mining companies concerned about their long-term reputation, licence to operate, or contribution to decarbonisation efforts may start to consider more aggressive decarbonisation and resilience plans.”

Zenith Energy and Independence celebrate solar start up at Nova

Operations at Independence Group’s Nova nickel-copper-cobalt operation in the Fraser Range of Australia are now being powered by a mix of diesel and solar energy after the on-site hybrid solar PV-diesel facility started up.

Zenith Energy’s wholly owned subsidiary, Zenith Pacific, built the plant. The ASX-listed power company also owns and operates the facility, which, it said, is already exceeding performance targets for power output and energy efficiency.

The two signed a contract back in 2018, amending an existing power purchase agreement.

Within the 26.6 MW facility is 5.5 MW of state-of-the-art photovoltaic (PV) modules, single axis tracking, inverters and communications and control system technology, according to Zenith Energy’s Managing Director, Hamish Moffat. The system also features high-efficiency diesel-fuelled generators that combine with this control system to optimise solar and diesel power delivery.

Moffat said: “The proprietary hybrid system developed by the company is able to seamlessly manage the fluctuations in solar PV energy production to provide smooth, reliable power, without the need for batteries to stabilise energy delivery to Nova.”

He explained that batteries have their place in energy systems but are still expensive to deploy for these applications.

“Our unique, locally developed hybrid system eliminates the need for batteries and represents a major step forward in the capital cost optimisation, operating efficiency and environmental performance of solar PV hybrid energy systems in remote locations,” he added.

According to Moffat, the system is saving Nova in the order of 6,500 litres of diesel a day, and it is the first hybrid solar PV-diesel installation to have been funded on a commercial, standalone basis – without any government subsidies.

IGO’s Chief Operating Officer, Matt Dusci, said: “At IGO we are striving to reduce our carbon footprint. The implementation of new technologies with the construction of a hybrid‐solar system at Nova will enable IGO to reduce our CO2-equivalent emissions by approximately 6,500 t per annum. The solar facility will also decrease our cost structure through reductions in our diesel fuel usage.”

As part of an agreement between the two companies, Zenith will supply power from the solar PV‐diesel hybrid system for an initial six‐year period, with an option for Independence to extend for a further two years.

Nova is expected to produce 6,750-7,500 t of nickel concentrate in the year ending June 30, 2020, alongside 2,750-3,125 t of copper concentrate and 213-238 t of cobalt concentrate, according to the miner’s September quarter results.

Mining EPC/EPCM space in transition mode, Ausenco’s Ebbett says

The past 12 months has been an interesting period for the mining EPC/EPCM space with miners looking to offload more risk and leverage new technology to improve design accuracy, reduce cost and shorten the time between construction and production.

Ahead of the annual focus on this sector, to be published in International Mining’s December issue, IM heard from Ausenco’s Vice President of Global Project Delivery, John Ebbert, on the recent trends affecting the project design, construction and delivery market.

IM: In the past 12 months, how has the market for mining EPCM contracts evolved? Do some of the big contract awards to the likes of WorleyParsons (Koodaideri), Bechtel (QBII) indicate a shift in the type of contracts/services some of the big projects/companies are now looking for?

JE: These large project awards are in line with increased mining investment. The market is moving towards a greater level of integration between owners and EPCM service providers with a focus on minimising risks typically associated with mega projects. This is not only the case in the mining sector; we are seeing similar trends in other sectors. This shift reflects the capacity of each contracting party to accept risk. During periods of reduced activity, contractors need to accept greater risk (EPC) to protect their revenue and margins. Conversely in periods of greater project activity, contractors are able to realise similar margins on a risk-free basis (EPCM).

IM: Over the same time period, has automation become more firmly entrenched in mine engineering plans? Are big open-pit mines now being designed to facilitate autonomous equipment or a combination of manned and autonomous equipment?

JE: Automation is considered at all stages of project development. The productivity and efficiency gains afforded by automation and digitisation help de-risk or improve return on investment, something owners always aim to achieve. The level and application of automation ranges from simply reducing dependency on operators, through to the creation of digital twins that support asset optimisation using advanced analysis techniques. Not only are we designing mines that support and enable automation, we are also designing to enable advanced data and analytics processes.

IM: For underground mine design, how has the evolution of mine electrification influenced design? Is the use of this equipment enabling mines to go deeper on ramps than they were previously able to (thanks to reduced ventilation needs)?

JE: The evolution of mine electrification emphasises the need for flexible mine design that will accommodate new and emerging technology predicted to be mainstream in the not-so-distant future. Adequately ventilating underground mines is a challenge due to the sheer volume of power required to move and potentially cool the air. Not only does the shift away from diesel-powered equipment towards electrification have well documented health and environmental benefits, it also allows greater flexibility in development cycles, mining at greater depths and increased productivity as ventilation requirements to maintain a safe environment for personnel are lower.

IM: In terms of the project pipeline, what are the big contract awards to look out for in the mining space over the next 12 months?

JE: From a global market perspective, we are expecting continued demand for and investment in metals such as copper, lithium and cobalt in line with the increasing global demand for electric vehicles. Similarly, due to global trade and market uncertainty, gold is likely to remain a strong player in the next 12 months.

Wood’s cobalt and copper refining expertise tapped for Jervois ICO project

Having recently sewn up the lead engineers for finalisation of a bankable feasibility study (BFS) at its 100%-owned ICO cobalt-copper project in Idaho, US, Jervois Mining has selected Wood as its preferred engineering contractor to progress the refinery scoping study at the project.

The ICO, planned to be the only domestic cobalt mine within the US, is expected to commence commercial concentrate production in the second half of 2021.

Jervois said Wood has expertise in the refining of sulphide concentrates through to both battery-grade crystal and refined LME copper and 99.8% LMB cobalt metal, which will be of use in this study. The company said: “Wood is well placed to lead the engineering study which includes an initial high-level review of commercially available technology for the refining of sulphide concentrates through to metal.”

Battery recycling technology and third-party feed processing will also be considered to highlight future market opportunities that may enhance the refineries strategic importance within the US and further improve the economic returns, Jervois said.

Mineralogy and metallurgical test work progressing at SGS will optimise the selective cobalt concentrate chemical characteristics and be applied in the flowsheet options study.

“As part of the current feasibility study being led by DRA and M3, preliminary results obtained from the SGS test work have achieved satisfactory separation and selectivity between copper and cobalt,” Jervois said, adding that locked cycle tests are planned to define the improved selectivity.

The Wood refinery study will be completed during the March quarter in conjunction with the previously announced feasibility study to concentrate.

Canada Cobalt looks for vertical integration with PolyMet Resources deal

Canada Cobalt Works has widened its processing options for both its Castle and Beaver projects, in the Cobalt Camp of northern Ontario, Canada, with the acquisition of a permitted and operating mineral and precious metal processing facility.

The company has signed a letter of intent to acquire the assets of PolyMet Resources Inc, owner of ISO-certified PolyMet Labs and the Cobalt Camp’s only permitted and operating mineral and precious metal processing facility, it said.

The C$650,000 ($491,861) transaction, expected to be made up of cash and shares, provides the company with “multiple immediate and long-term advantages”, it said. This includes a high capacity bullion melting furnace to pour payable silver and gold doré bars. The 23,400 sq.ft (2,174 sq.m) facility has sampling and analytical capabilities and can also host the company’s proprietary Re-2OX Process for environmentally-friendly extraction of cobalt, precious and base metals, it said.

Re-2OX skips the normal smelting process to create battery-grade cobalt sulphate, according to Canada Cobalt Works, with the company earlier this year saying it planned to submit a patent application to protect the technology.

The transaction will see the lab and mineral processing facility become the new headquarters of Canada Cobalt. This facility is located in the town of Cobalt, immediately adjacent to a rail line and just a short distance from the company’s Castle mine and Beaver properties.

The company said: “This well-established sampling and analytical facility, specialising in high-grade mineralisation, provides commercial assaying, crushing, screening, grinding, bulk sampling, upgrading and smelting services all in one location, driving multiple revenue streams at a time when gold prices in Canadian dollars have hit new record highs.”

According to the company, PolyMet has demonstrated that in an eight-hour shift, it can pour up to 10 doré silver bars of 1,000 oz each (90% to 95% fine).

“PolyMet is currently making inroads into the potentially lucrative e-waste business that can be leveraged through Canada Cobalt, its extensive relationships and its Re-2OX Process,” Canada Cobalt said. “Material from mixed computer boards is being processed through the facility’s shredder and ball mill to recover precious and base metals.”

Frank Basa, President and CEO of Canada Cobalt, said: “This deal builds dramatically on Canada Cobalt’s current competitive advantages and opportunities – technological, on the ground and underground – in a rejuvenated silver-cobalt district recognised as the birthplace of Canadian hard-rock mining.

“With such a unique and fully operational facility in the town of Cobalt, so close to the Castle mine and other properties, Canada Cobalt achieves a key goal of becoming a vertically integrated leader in Canada’s silver-cobalt heartland while it also exploits a powerful new cycle in precious metals.”

Gino Chitaroni, Majority Owner of PolyMet Resources, said: “We see some really exciting synergies here. Canada Cobalt’s track record of success in this district made them the perfect fit to take the PolyMet Lab and facility to the next level while I remain involved to assist Canada Cobalt from an operational standpoint.”

He continued: “Bullion pouring, bulk sampling, commercial assaying and e-waste are PolyMet’s four key immediate profit centres that merge with Canada Cobalt, creating powerful new synergies. Hosting Re-2OX and accelerating the development of such a unique and environmentally friendly process at this facility is a major coup for the town of Cobalt and the broader district.”

Opening speaker and keynotes secured for ALTA 2020

The ALTA 2020 conference is shaping up nicely, with new opening and keynote speakers just announced for its 25th anniversary event.

Stedman Ellis, Chief Executive Officer of Future Battery Industries CRC (Australia), is set to open the conference with a paper titled, “A Research-Based Strategy for Establishing Australia as a Leading Player in the Emerging Global Battery Industry”.

Meanwhile, John Neale, Technical Specialist at Mintek (South Africa), is set to take on the nickel-cobalt-copper keynote with a talk titled: ‘Bioleaching of Nickel and Cobalt – The Progress and The Potential’.

The annual metallurgical event, to be held in Perth, Western Australia, on May 23-30, will also include a uranium-REE keynote from Darryl Butcher, Director of BDB Process (Australia). Butcher will present, ‘Review of Membrane Technology as a Process Tool’ at the event. The gold and precious metal keynote will come from Karel Osten, Independent Consultant at Mettko Pty Ltd (Australia), who will go some way to answering: ‘POX – Has it Reached its Full Potential, or is There Still Room for Improvement for Treating Refractory Gold Ores?’

The in-situ recovery keynote is yet to be announced, but Professor Peter Talbot, from the Institute for Future Environments at Queensland University of Technology (Australia), has the honour in the lithium and battery technology session. His paper is titled: ‘The Creation and Implications of Australia’s First Lithium-Ion Battery’.

For more information on ALTA 2020, follow the website here: www.altamet.com.au/conferences/alta-2020/

International Mining is a media sponsor of ALTA 2020

DRA Global and M3 Engineering on board Jervois ICO cobalt-copper project

Jervois Mining says it has selected DRA Global and M3 Engineering as lead engineers for finalisation of a bankable feasibility study (BFS) for its 100%-owned ICO cobalt-copper project in Idaho, US.

The selection of engineers comes only two months after Jervois got its hands on the project following a completed merger with eCobalt.

Jervois said: “DRA and M3 have extensive study and construction experience across all the relevant unit operations for the ICO, providing a strong basis for successful BFS delivery. They were chosen due to their strong track record with relevant process plant studies as well as construction and operating implementation phases, as Jervois looks to move seamlessly into construction after BFS and project financing close.”

The joint engineering team has extensive global experience across both cobalt and copper mining operations and concentrator flowsheets, while also having a detailed understanding of project delivery in the US, specifically local conditions in Idaho and regional contractor capabilities, Jervois said.

Finalisation of the BFS will be based on a flotation mill processing 1,200 short tonnes per day (1,089 t/d) of ore, as well as ancillary facilities. The project will ultimately consist of an underground cobalt-copper mine, a flotation mill processing 1,200 st/d as well as ancillary facilities. The latter will include aspects such as the mine and related infrastructure, run of mine pad and crushers, fine ore conveyor and silo, mill and flotation, tailings, waste rock and water storage facilities, water treatment plant, soil stockpile area, National Pollutant Discharge Elimination System discharge outfall and non-process infrastructure to support the development and mine operations.

Jervois expects the BFS will be concluded in the March quarter of 2020 and summarised in a NI 43-101 compliant feasibility study soon after. The company has commenced a diamond core drilling program at ICO to supply metallurgical samples for test work to support the BFS update, and to infill drill the RAM deposit during initial years of envisaged mining operation.

ICO will initially produce and sell separate cobalt and copper concentrates as Jervois formed a view early in its due diligence of ICO that reversion to separate concentrates was commercially necessary in the absence of a US refinery. In comparison to the partially completed mine and mill, the refinery is at a preliminary level of study and technical certainty, and so cannot be realistically constructed within the same timeframe as mine to concentrate.

Jervois has commenced discussions with offtake partners for an initial period covering mine ramp up and stabilisation. Jervois will also commission a refinery engineering study to consider commercially proven technology to process concentrates, including third party feed through to refined cobalt and copper.

With the ICO BFS team now established, DRA and M3 will progress the engineering design for the process plant and infrastructure. In parallel, Jervois has commenced discussions with potential lenders and a data room is being prepared to facilitate due diligence. Upon project financing close and opening of the ICO mine portal and decline, Jervois expects a 12-month construction period with first saleable concentrate in the second half of 2021

Ausenco to lead First Cobalt refinery restart study

First Cobalt Corp, following a finance agreement with Glencore, has started to award key contracts to complete a 55 t/d feasibility study on the proposed expansion of its cobalt refinery.

Field work is expected to commence in September and will culminate in the delivery of a definitive feasibility study (DFS) in the March quarter, the company said.

Ausenco Engineering Canada will lead the preparation of a DFS for a refinery restart at 55 t/d with SGS carrying out advanced metallurgical test work on cobalt hydroxide and a specialty cobalt feed to be supplied by Glencore, Knight Piésold conducting tailings studies in support of the DFS, Story Environmental taking on the environmental and permitting aspects of the engineering studies and Glencore providing technical support throughout the study phase through its Sudbury-based affiliate, XPS – Expert Process Solutions.

In addition to the delivery of the DFS on a 55 t/d refinery restart, a prefeasibility study (PFS) on a 12 t/d interim operating scenario will also be conducted.

First Cobalt recently announced it had entered into a $5 million loan facility with Glencore to complete advanced engineering, metallurgical testing, field work and permitting associated with a recommissioning and expansion of the refinery. Upon completion of a positive DFS for the expansion, and subject to certain other terms and conditions, Glencore is prepared to advance an additional $40 million to recommission and expand the refinery, according to First Cobalt.

Trent Mell, First Cobalt President & CEO, said: “The First Cobalt Refinery is a permitted facility that is in excellent condition and has a recent operating history. Our strategy is to work with Glencore to expand the refinery to serve the growing needs of the North American electric vehicle market. To that end, we have partnered with a first-rate study team appropriate for the importance of the task at hand.”

First Cobalt edges closer to refinery restart after signing Glencore term sheet

First Cobalt Corp says it has agreed on a term sheet with Glencore that could see the First Cobalt Refinery in Ontario, Canada, recommissioned as early as next year.

The agreement outlines a non-dilutive, fully funded, phased approach to recommissioning the refinery remains subject to several conditions, First Cobalt said.

The First Cobalt Refinery is a hydrometallurgical cobalt refinery in the Canadian Cobalt Camp, a cluster that was historically mined for primarily silver, but is now being evaluated for cobalt. It is the only permitted primary cobalt refinery in North America, according to the company.

Phase 1 of this term sheet entails a $5 million loan from Glencore to support additional metallurgical testing, engineering, cost estimating, field work, and permitting associated with the recommissioning of the refinery. Within this amount is funding for a definitive feasibility study for a 55 t/d refinery expansion.

Phase 2 envisions commissioning the refinery at a feed rate of 12 t/d in 2020 to produce a battery-grade cobalt sulphate for prequalification for the electric vehicle supply chain, while Phase 3 involves an expansion of the refinery to a 55 t/d rate by 2021. This uses the current site infrastructure and buildings, and was detailed in a previous report by Ausenco, which estimated that First Cobalt could produce 5,000 t/y of contained cobalt in sulphate assuming cobalt hydroxide feed grading 30% cobalt.

The total capital investment under the three phases is estimated at around $45 million, with Phases 2 and 3 remaining subject to the findings of the studies undertaken during Phase 1, First Cobalt clarified.

Trent Mell, First Cobalt President & Chief Executive Officer, said: “Transitioning to cash flow as a North American refiner is our primary focus and today’s news demonstrates that we are moving closer to achieving that objective. Glencore has been supportive throughout the process and we look forward to working closely with their technical team on a successful execution.

“This partnership will help First Cobalt achieve its stated objective of providing ethically-sourced battery-grade cobalt for the North American electric vehicle market. An operating refinery in North America can benefit all North American cobalt projects, as it significantly reduces the capital cost of putting a new mine into production.”

The framework follows a memorandum of understanding signed by the companies back in May.

First Cobalt will also enter into a services agreement with XPS – Expert Process Solutions, a Sudbury-based metallurgical consulting, technology and testing facility affiliated with Glencore, in order to provide technical support to the First Cobalt team. A tendering process is nearing completion to designate lead third-party firms to oversee advanced metallurgical testing, the feasibility study and permitting, First Cobalt said.