Cobalt Blue Holdings: The Future Supplier of Large-Scale Low-Cost Battery-Grade Ethical Cobalt

Summary

• Strong growth expected in renewable power and battery sector, aiding in global temperature target (1.5-2°C), as per the Paris Agreement
• World Bank predicts a 460% increase in demand for cobalt by 2050 against 2018 levels
• For scarcity of ethical cobalt, Cobalt Blue’s largest greenfield cobalt project (Ex Africa), BHCP might be an answer
• Cobalt Blue developing a proprietary processing technology to produce battery-grade cobalt products, with the project aided by the Government

World Bank Group anticipates the demand for battery materials such as graphite, lithium and cobalt to surge by ~500% by 2050. The international financial institution expects the increase in demand to cater to the escalating adoption of clean energy technologies, required to achieve a below 2°C future.

To achieve a low-carbon future, clean energy will require minerals to reduce the carbon footprint across the value chain, anticipated to result in only 6% of the GHG emissions produced by fossil fuel technologies. Cobalt, a key commodity for battery cathode, is expected to account for 6.2% of total mineral demand up to 2050 under the IEA’s 2-degree scenario (2DS).

Currently, DRC (Democratic Republic of Congo) produces over 60% of cobalt, globally, and as the African country is under unstable conditions, there is often supply disruption in the market. Sustainable and ethical supply of cobalt is desired in future, with the commencement of large-scale long-life cobalt mines. Under the IEA’s 2-degree scenario, demand for cobalt is expected to grow by ~460% (wrt to 2018 levels) by 2050.

Cobalt Blue Holdings – A Green Energy Technology Company

Cobalt Blue Holdings Limited (ASX:COB), a pure play cobalt exploration and development company, is advancing on the wholly owned flagship Thackaringa Cobalt Project, also known as Broken Hill Cobalt Project (BHCP). To remind you- the Thackaringa Cobalt Project is the largest greenfield cobalt project outside Africa and is located in the vicinity of Broken Hill in New South Wales.

The project enjoys mining friendly environment with the presence of extensive excellent mining infrastructure including access to power, water, road, and rail.

BHCP – A Globally Significant Australian Project

The Broken Hill Cobalt Project has a long mine life target of over 20 years with mineral resources of more than 111 million tonnes containing over 79,000 tonnes of cobalt at a cut-off grade of 400 ppm Coeq, with further potential for expansion through exploration or acquisition.

The project is anticipated to have an annual capacity of 3,500 tonnes of cobalt and 300,000 tonnes per annum of elemental sulphur. The C1 cash cost is expected around US$10-11 per lb cobalt, which well places the project in the lowest quartile. The maiden mineral reserves estimation is expected to be completed by second quarter of 2020. Moreover, the feasibility study completion and final investment decision is expected by first half of 2022.

Cobalt Blue Advancing on Battery Road with Broken Hill Project: Must Read

COB Developing Advanced Process Technologies

The Australian Government under the Cooperative Research Centre (CRC) – Project Round 8 program granted $2.4 million to a consortium led by the Company for the research & development of battery-grade cobalt products from pyrite ores. Of the total grant, $1.57 has been allocated towards the construction of a pilot plant at BHCP, which is anticipated to commence operations by last quarter of 2020.

Cobalt Blue already has a product evaluation agreement with Mitsubishi Corporation, to produce up to 100 tonnes of elemental sulphur from pilot testwork. For successful commercialisation of the battery grade cobalt product, the Company has a long-term corporate partnership with LG International (LGI), which is the resources investment business of LG Corporation, holding one of the world’s largest lithium-ion battery manufacturers.

Cobalt Blue is progressing on metallurgical testworks at Global Energy Metals Corporation’s Millennium Co-Cu-Au Deposit near Mount Isa. The application of COB’s proprietary minerals processing technology to the cobalt-pyrite material from the Millennium project resulted in an overall recovery of 90% cobalt, 95% copper and 90% gold, thereby offering high recoveries for not just cobalt but for other co-existing commodities as well. Another testwork program at OZ Minerals Limited’s (ASX: OZL) Carrapateena mine is expected to be completed soon.

Stock Performance - COB closed at $0.125 a share on 27 May 2020, moving upward by ~8.7% over the last close, with the Company boasting a market capitalisation of $18.39 million. The last one-month return of the stock was noted at 9.52%.

Note- All currency information pertains to A$, unless stated otherwise.