Blackstone Minerals Ltd (ASX:BSX) (OTCMKTS:BLSTF) (FRA:B9S) has signed a non-binding letter of interest with Trafigura Pte Ltd for the potential supply of nickel and cobalt products for the production of downstream products for the lithium-ion battery industry at the Ta Khoa Nickel Project in Vietnam.
The LoI is part of its strategy to upscale its downstream refining business and its vision to become a significant global supplier of downstream nickel products for the lithium-ion battery industry.
Trafigura is one of the world’s largest physical commodities trading groups and one of the leading physical commodities traders involved in copper, zinc, lead, nickel & cobalt trading.
Significant global, green nickel product supplier
Blackstone Minerals managing director Scott Williamson said: “We are delighted to have laid the foundations for our relationship with Trafigura, a globally significant trading company.
“Blackstone is taking steps to become a significant global, green nickel product supplier catering to the battery market.
Vietnam ideally suited
“We believe Vietnam is ideally situated to manufacture green nickel products, given its competitive costs, abundant supply of renewable energy and excellent infrastructure.
“In recent years, the country has demonstrated an enviable record of attracting foreign direct investment, particularly from Asian countries.
“In addition, our strategy to upscale the downstream business is particularly pertinent, given leading battery manufacturers have indicated the potential to construct battery manufactory facilities in country.
”The economic return on capital invested downstream is underpinned by superior margins achieved by producing downstream products.
Adds scale to downstream business
“We are confident we can deliver a robust downstream processing flow sheet, enabling value to be realised from our mining inventory at Ta Khoa, as well by purchasing and subsequently refining of a range of nickel & cobalt materials.
“The purchase of third-party nickel and cobalt materials not only adds scale to the downstream business, it also adds diversification and reduces risk across the company’s portfolio of assets in Vietnam.”
Blackstone’s scoping study contemplates construction of a downstream refinery with the ability to process up to 200,000 tonnes per annum (tpa) of concentrate, sourced entirely from mining operations at its Ta Khoa Project.
It plans to upscale its downstream refining business, through the staged construction of additional refining capacity.
The arrangement with Trafigura reflects the expectation by Blackstone that additional downstream refining capacity will be met by materials sourced from third-parties.
Blackstone’s downstream strategy is in response to recent discussions with major players in the lithium-ion battery industry, which continue to focus on rapidly increasing demand for downstream nickel products.
The company will continue to engage with parties interested in Blackstone’s downstream products, including ongoing discussions with multiple potential joint venture partners regarding various offtake financing and or other funding options.
Blackstone will commence studies and permitting for the downstream business. In parallel with the completion of a definitive feasibility study (DFS), a pilot and demonstration plant will be commissioned in-country.
The pilot and demonstration plant will be used to advance downstream process flowsheets focussed on producing NCM precursor products.
Trafigura sources, stores, transports and delivers a range of raw materials, including oil and refined products and metals and minerals, to clients around the world and has recently established a power and renewables trading division.
The trading business is supported by industrial and financial assets, including a majority ownership of global zinc and lead producer Nyrstar NV (FRA:3NY1), which has mining, smelting and other operations in Europe, Americas and Australia.
It also has significant shareholding in global oil products storage and distribution company Puma Energy; global terminals, warehousing and logistics operator Impala Terminals; Trafigura's Mining Group; and Galena Asset Management.
Ta Khoa Project
Blackstone Minerals is developing the district-scale Ta Khoa Project in northern Vietnam, where it has a maiden resource and scoping study for the large-scale Ban Phuc Nickel-PGE deposit.
The Ta Khoa Nickel-Copper-PGE Project has existing modern mine infrastructure built to international standards, including a 450,000 tpa processing plant and permitted mine facilities.
Blackstone also owns a large landholding at the Gold Bridge project within the BC porphyry belt in British Columbia, Canada, with large scale drill targets prospective for high-grade gold-cobalt-copper mineralisation.
In Australia, Blackstone is exploring for nickel and gold in the Eastern Goldfields and gold in the Pilbara region of Western Australia.