Clean TeQ Holdings and Fluor Australia have come up with a Project Execution Plan (PEP) for the Sunrise Battery Materials project in New South Wales, Australia, that, Clean TeQ says, confirms the asset’s status as one of the world’s lowest cost, development-ready sources of critical battery raw materials.
In production, it will be a major supplier of nickel and cobalt to the lithium-ion battery market, and scandium to the aerospace, consumer electronics and automotive sectors, according to Clean TeQ.
The PEP scope of works included a range of studies which have optimised metal production rates while holding autoclave ore feed constant at the approved maximum 2.5 Mt/y, it said. This saw average annual (metal equivalent) production rates of 21,293 t of nickel and 4,366 t of cobalt in years two to 11; and 18,439 t of nickel and 3,179 t of cobalt from year two to 25.
On top of this, the PEP considered a scandium oxide refining capacity of up to 20 t/y installed from year three, which can readily be expanded to 80 t/y with around A$25 million ($18 million) capital expenditure on additional refining capacity.
“As the scandium market grows, future investment in a dedicated resin-in-pulp scandium extraction circuit and further refining capacity offers the potential to increase by-product scandium production to up to approximately 150 tonnes per annum,” Clean TeQ said.
The pre-production capital cost estimate of $1.658 billion (excluding $168 million estimated contingency) reflects a significantly de-risked capital cost, with approximately 79% of total equipment and materials costs covered by vendor quotations, Clean TeQ said. Submissions were also obtained from contractors to validate the labour costs included in the total direct cost.
On the operating expenditure side, C1 costs came in at $4.31/Ib ($9,503/t) of nickel before by-product credits in years 2-11 and $4.58/Ib before by-product credits over years 2-25.
Using weighted average forecast (metal equivalent) sulphate prices over the life of mine of $24,200/t (including sulphate premium) for nickel and $59,200/t of cobalt, the project would generate a post-tax net present value of $1.21 billion, the company said.
Future value optimisation studies to assess opportunities to reduce capital expenditure in areas of off-site pre-assembly, modularisation and low-cost offshore procurement could further improve this return, it said.
The PEP assumed the project execution on an engineering, procurement and construction management (EPCM) basis. Prior to making a final investment decision, Clean TeQ will select an EPCM contractor for the engineering, procurement and construction phase of the project, it said.
Clean TeQ Co-Chairman, Robert Friedland, said: “Auto supply chains are coming to realise they are playing a game of nickel and cobalt musical chairs. We are half-way through the second verse and the music will eventually stop.
“We have a clear vision for how to create a sustainable auto supply chain of the future. Our team is proud to present that vision today. Sunrise is a long-life, low-cost, development-ready asset which is a template for consistent, sustainable and auditable nickel and cobalt supply. We cannot anticipate how long it will take to have the project funded and in development, but we can be patient with such a strategically important asset, and we are fully committed to ensuring it is developed with partners who understand the value that responsible supply chain integration brings.”
Although the level of activity associated with the PEP study and engineering works will now significantly reduce, Clean TeQ said a range of work-streams will continue in order to progress a number of value-adding deliverables aimed at minimising project restart time once funding is secured:
- Work will be progressed on the long-lead electrical transmission line (ETL) work scope. The ETL application to connect to the NSW electrical grid is currently in progress and will continue through the 2021 financial year;
- Progressing ongoing commercial discussions with landowners, local councils, the New South Wales state government and other impacted parties required for land access agreements for key infrastructure including the water pipeline and the ETL;
- Surveying and planning for autoclave and oversize equipment transport routes to site;
- Preliminary investigations to be undertaken on exploration licences for limestone resources, a key process reagent for which the company currently has a supply contract in place with a third party;
- Test work and engineering assessing opportunities for potential further downstream processing of sulphates into battery precursor materials;
- Ongoing environmental work including monitoring and compliance reporting;
- The Sunrise Community Consultative Committee will be maintained along with several local community engagement/support programs; and
- A range of scandium alloy development programs will continue to be progressed, consistent with Clean TeQ’s long term strategy to work with, and assist, industry players to investigate and develop new applications for scandium-aluminium alloys.