Cobalt Blue Holdings Ltd (ASX:COB, OTC:CBBHF) has received positive feedback from potential customers for the high-quality Mixed Hydroxide Product (MHP) samples produced at the Broken Hill Cobalt Project (BHCP) Pilot Plant.
The premium MHP samples produced at the plant in Broken Hill that typically range from 35-41% cobalt and 3-10% nickel are proving of significant benefit to the company’s BHCP Global Project Partner search.
This work has demonstrated COB’s ability to produce a variety of high-grade tailored specifications to suit various end-user requirements.
Surpass industry benchmark
Samples produced at the plant clearly surpass the industry benchmark which is used for pricing.
Company chair Rob Biancardi said: “This is fantastic news for our international partners.”
With the Pilot Plant demonstrating its capability to customise product specification COB intends to listen to partners to better understand their specific product requirements and optimise its production process towards such goals.
The trade-off between product specification/pricing and production costs is critical to maximising the BHCP operating margin.
COB’s CEO Joe Kaderavek said: “The production of such high-quality MHP samples in our Pilot Plant is a significant achievement for COB and our Broken Hill team.
"Looking forward, the transition towards a (24/7) Demonstration Plant to produce ~3,000 kilograms of cobalt samples will greatly assist in our global Project Partner search.
"The BHCP is a ~20-year, large-scale, ethical cobalt producer, enough cobalt for 5 million electric vehicles.”
The Pilot Plant comprises circuits for concentration, leaching and product recovery. These have been supported by calcining test-work completed externally at ANERGY in Bunbury WA.
BHCP Process Flowsheet.
Sample program extended
This plant has been running operationally since early in quarter two of 2021. However, the effects of COVID 19 upon rosters (people movement both inter/intra state) and equipment/parts availability has been to extend the sample program into Q3.
COB advises that all sample cobalt MHP products have been finalised with partner samples being or have been dispatched.
Looking forward COB expects more freedom to resource shift rosters and equipment/parts availability in the December quarter as COVID 19 vaccination rates bring more normalcy to the Australian workplace.
Post Pilot Plant operations, the company will expand the circuits to include calcining and upgrade equipment to permit the Demonstration Plant to operate on a 24/7 basis.
Feedback received to date has been largely technical in nature and focused upon sample specifications and whether the customer can readily process the cobalt/nickel balance as well as the residual trace elements contained within.
To date, the company has received strong positive feedback on these samples.
Pilot Plant MHP samples ready for dispatch.
Hydroxide intermediates represent approximately 75% of total global cobalt trade. The supply side is dominated by production from the Democratic Republic of Congo (DRC) whose contribution is expected to increase over the near term.
Hydroxide intermediates are typically purchased by specialist refining companies. Cobalt hydroxide intermediate is sold on a pricing formula with two components, prior to adjustment for penalty elements (impurities).
The first is the floating payables which is relative to the underlying cobalt metal price. The second is the cobalt content.
Fastmarkets quote prices for 30% minimum content cobalt intermediate hydroxide, with typical cobalt content of hydroxide from the DRC being 25-40%. Strong nickel credits will likely command a further payable metal for the COB MHP product.
During FY20, COB announced its ability to produce a 37% cobalt + 7% nickel MHP at a laboratory scale while the recent Pilot Plant samples (sourcing cobalt from 90 tonnes of ore) produced a range of assays within the following typical limits: 35%-41% cobalt and 3-10% nickel.
COB aims to keep running the Pilot Plant beyond the initial sample program with the additional runtime expected to provide a better understanding of equipment performance.
Also, additional cobalt materials, including some cobalt sulphate as requested to partners already receiving MHP, will be produced.
The company considers it likely that further sample requests will be made and to date, one partner has asked for a much larger MHP sample, that will be used as a basis for qualifying the BHCP into their production chain.
It is anticipated that further larger-scale sample requests will be made and ultimately, it is intended that the larger scale Demonstration Plant will be used to produce these scale samples.
Transition to larger-scale plant
The transition to a larger-scale plant is well underway with this plant to target >3,000 tonnes of ore as feedstock to produce approximately 3,000 kilograms of MHP and cobalt sulphate.
COB expects to have the Demonstration Plant achieve continuous 24/7 operation during the first quarter of 2022, with larger samples produced shortly thereafter. The scale of the facility will allow >100-kilogram cobalt samples to be produced in under a week.
This scale is globally unique for a greenfield cobalt project and represents a major de-risking step by the end of Q1 2022.
This facility will allow COB to make large-scale, multiple cobalt products whilst assessing the suitability of key equipment and process conditions.
Key new equipment includes a kiln and sulphur recovery circuit, larger pressure oxidation reactors and increased filtration capacity for MHP.
Whilst the install does involve some larger equipment, the step-change in production scale of cobalt samples is primarily due to operating the plant on a 24/7 basis.
Data for feasibility study
In addition to cobalt and sulphur samples for offtake assessment, the Demonstration Plant will also provide plant engineering design data for the BHCP Feasibility Study.
Outside of BHCP needs, the Demonstration Plant will remain in place to provide test-work facilities for other COB projects as they arise, including the new Cobalt in Waste Streams Project.
The targeted spread of the Global Project Partner search includes battery industry participants, electric vehicle manufacturers, mining companies, commodity trading houses, financial institutions, government bodies and royalty/commodity streaming entities.
BHCP will target 3,500 tonnes per annum cobalt as either MHP or cobalt sulphate. That’s enough cobalt units to power more than 5 million electric vehicles.
Cobalt in Waste Streams Project
COB has launched its Cobalt in Waste Streams Project, with initial work focused on:
- Mining Waste – mining waste streams including both dormant tailings and current operations;
- Battery recycling (Black Mass) – spent and recycled cathode material; and
- Industrial Waste – company-specific waste streams.
The company anticipates that first Cobalt in Waste Streams Project test-work will commence from late this year, followed by discussions for commercial development with relevant stakeholders.
Role of cobalt in EVs
Cobalt provides stability and allows superior EV battery energy density and performance. It is not essential in all EV batteries, however, the performance of cobalt-based batteries strongly supports the mass-market passenger vehicle and sport/luxury vehicle markets.
Cobalt - Superior Battery Performance/Cobalt EV battery market share.
The trend to increase nickel content in the cathode is reaching limits. This 'cobalt thrifting' is a natural market response.
As battery technologies develop, purity remains key for raw materials and battery performance – hence the COB focus on the BHCP cobalt product specifications.
According to Bloomberg New Energy Finance, the cobalt market share of EV batteries will remain >80% over the next decade.