Building Blocks for BHCP to Establish Cobalt Blue As A Top Tier Ethical Cobalt Supplier

  • Aug 05, 2020 AEST
  • Team Kalkine
Building Blocks for BHCP to Establish Cobalt Blue As A Top Tier Ethical Cobalt Supplier

Summary

  • Cobalt Blue, an exploration and project development company, is advancing wholly owned Broken Hill Cobalt Project (BHCP), holding the potential to be one of the largest suppliers of ethical cobalt (ex-Africa).
  • Testwork results confirmed that COB can produce 20.8% cobalt sulphate suitable for lithium ion battery market and 99% grade sulphur from BHCP ore samples.
  • BHCP Update 2020 highlighted increased ore reserve, longer operating life, and lower capital and operating costs.
  • Australia and India signed a bilateral agreement to cooperate for critical minerals, a key aspect for the “Make in India” dream. COB looks forward to introducing BHCP.

Cobalt Blue Holdings Limited (ASX:COB) is a green energy explorer, focused on advancing its flagship Broken Hill Cobalt Project (BHCP) in New South Wales. Last month, the Company shared a letter from its CEO Joe Kaderavek, who highlighted that COB established important building blocks for the project with the recently released testwork and project update 2020.  

Benchmark Cobalt Product, Higher in Comparison to Battery Industry Specifications

The latest testwork results substantiated that the BHCP can produce high purity, battery ready cobalt sulphate. The results confirmed that the Company can produce 20.8% battery grade cobalt sulphate heptahydrate and 38% cobalt and 7% nickel in the intermediate Mixed Hydroxide Product (MHP) with a more than 99% pure elemental sulphur product from BHCP ore samples.

Cobalt Blue targets to produce larger quantities of these products for further metallurgical tests in a continuous process flow at the upcoming pilot and demonstration plant during 2020-2021.

Source: COB ASX Update

The Broken Hill Cobalt Project seeks to emerge as a direct supplier to the battery and EV manufacturers for cathode production. The cobalt sulphate produced from the sample BHCP ores qualifies as a precursor to battery cathode manufacturers at a threshold cobalt grade of 20.5%.

Cobalt Blue anticipates the current industry specifications to rise to 20.8% grade for cobalt in view of rising demand for higher quality, longer life batteries, and in line, the Company intends to be ready to serve the battery industry of the future.  

Broken Hill Cobalt Project: Long-Life, Low-Cost Battery Grade Cobalt Products

Cobalt Blue recently completed a review of the cobalt project, delivering significant project enhancements since the PFS 2018.

  • Low operating cost: Average life of mine C1 cash cost stands at US$9.34 per lb of cobalt inclusive of nickel and sulphur credits. The All-in Sustaining Costs (including sulphur & nickel credits) stood at US$12.13/lb. This places Broken Hill amongst the lowest quartile of the cash cost, globally.
  • Increased Ore Reserve: Mineral reserves improved by 55% to 71.8 million tonnes of ore at a cobalt grade of 710 ppm and a sulphur grade of 7.6%.
  • Longer Operating Life: Life of mine of the Broken Hill Cobalt project stands at ~14 years with 13 years of cobalt production. The operating life is targeted at 17 years.
  • Lower Capital Cost: The initial pre-production capital of $560 million includes a contingency of $70 million to develop and operate a mining and processing plant with annual capacity now increased to 6.3 million tonnes. The capital costs are almost a third in comparison to the other proposed greenfield cobalt projects. All in pre-production capital which includes mine, plant, infrastructure and environment stood at US$400 million.

The proposed integrated mining and cobalt refining operations at the project anticipates producing almost 3,500–3,600 tonnes of cobalt contained in 17,500–18,000 tonnes of battery ready cobalt sulphate in a year.

The Broken Hill Cobalt Project aims to emerge among the top 10 operations, globally, in terms of annual cobalt production, located in one of the safest and stable jurisdictions. The project development will establish Cobalt Blue among the largest suppliers of ethical cobalt outside Africa.

Pilot and Demonstration Plants to Establish High Purity, High Quality Nature of BHCP Products

The pilot and demonstration plants aim to deliver battery ready cobalt sulphate or intermediate hydroxide products for battery supply chains across regions including Asia, Europe and North America. Further extensive acceptance testing is required for the BHCP cobalt products to qualify as a cathode precursor feedstock.

Cobalt Blue received the initial shipment of pilot plant equipment in early March while the second delivery of plant equipment has already reached Adelaide and is currently in transit to the Broken Hill site. While the first delivery included key long-lead equipment such as an autoclave, flash vessel and a belt filter, the second delivery will include gravity spirals, reactors, storage tanks and processing pumps.

Source: COB ASX Update

The initial site-preparation stages and pre-construction works have been scheduled for Q3 2020, with construction and commissioning anticipated later in 2020. The despatch of cobalt samples is targeted for Q1 2021 while potential commercial partners will be able to access the demonstration plant in 2021.

COB Looks Forward to Introduce BHCP to India, An Exciting Lithium Ion Battery Market

With cobalt playing a vital role in the development of lithium ion batteries, a strong growth in demand is anticipated from the battery industry, on the back of increasing adoption rates of electric vehicles across all geographies, especially Europe and India.

The testwork results and Project Update 2020 provide new invigorated momentum to Cobalt Blue for commercial discussions. The Company has appointed leading corporate advisory firm, Newland Global Group (NGG), which specialises in establishing strong commercial engagements between Australia and India.

With the signing of Australia-India Critical Materials MOU (including cobalt) in June 2020, introduction of the Broken Hill Cobalt Project to one of the largest and exciting lithium ion battery markets will lead to a strong trade and co-operation between the allies. The government of India’s flagship “Make in India” program is anticipated to increase the demand for critical minerals in the country and establish indigenous battery industry.

Cobalt Blue anticipates strength in cobalt prices over the upcoming few years. The Company looks forward to the development of a major integrated cobalt mine and refining complex in a low political risk jurisdiction, aided with the presence of excellent existing infrastructure.

COB stock was trading at $0.115 a share on 5 August 2020 (AEST 01:55 PM), inching upward by 9.524% from its previous close.

Good Read: Scan Through Cobalt Blue’s June 2020 Quarterly Report With Noteworthy Accomplishments

(All currencies in AUD unless or otherwise stated)

 


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