Last week, Cobalt Blue Holdings Ltd (ASX:COB, OTC:CBBHF) announced a major supply agreement with Glencore International to support its Kwinana cobalt refinery. CEO Dr Andrew Tong said the deal covers up to 50% of its cobalt hydroxide requirements over an initial three-year term.
Highlights
- Cobalt Blue Ltd secured a cobalt hydroxide supply agreement with Glencore covering up to 50% of needs for the Kwinana refinery.
- The agreement is one of several milestones toward a Final Investment Decision (FID), targeted by the end of 2024.
- Product testing on Glencore’s material has been completed at Broken Hill with positive outcomes.
- The refinery will produce cobalt sulfate for batteries and cobalt metal for superalloys and defence.
- Joint venture partner Iwatani Corporation will hold 30% of the project; Cobalt Blue will hold 70%.
- Near-term focus is on securing financing support from debt agencies to advance the project.
Milestones to come
The agreement is part of a series of milestones the company aims to complete in order to reach a Final Investment Decision (FID) by the end of 2025. Cobalt Blue told investors that seed agreements, offtake commitments, and financing are among the key steps remaining.
Feedstock supply
The company originally planned to source feedstock domestically from its Broken Hill project. However, due to persistently low cobalt prices and other industry constraints, it said the Australian feedstock strategy has been paused. Tong said that last year 76% of global cobalt production came from the Democratic Republic of Congo (DRC), making international sourcing necessary.
Successful test processing
Cobalt Blue highlighted that it had already conducted successful test processing of a five-tonne Glencore sample at its Broken Hill demonstration plant, producing both cobalt sulfate and cobalt metal.
The company said the Kwinana refinery will supply cobalt sulfate into battery markets and cobalt metal into the superalloys and defense sectors. It noted that, although EV demand has softened recently, broader cobalt demand continues to grow.
The project is being developed as a joint venture with Iwatani Corporation, which will hold a 30% stake. The company said short-term priorities include supporting Iwatani’s engagement in Japan and progressing discussions with debt agencies to secure financing.