Cobalt Blue Holdings Ltd (ASX:COB, OTC:CBBHF) has upgraded the economics of its proposed Kwinana Cobalt Refinery after revising feedstock assumptions, product mix and market forecasts in response to a sharp rebound in global cobalt prices.
The company’s updated base-case (Stage 1) financial model shows a post-tax net present value (NPV8) rising to A$155 million (from A$90 million) and a post-tax internal rate of return (IRR) increasing to 32% (from 23%). Total operating cash flow over the life of the project is now expected to reach A$503 million, up from A$367 million previously.
Cobalt Blue says the uplift reflects a shift to cobalt-only feedstock, diversification of its cobalt sulphate and metal product slate, and strengthened price assumptions amid a materially improved cobalt market.
Project refinements and market reset
The Kwinana refinery is designed to produce about 3,000 tonnes of contained cobalt per year in Stage 1, split into roughly 2,000 tonnes of cobalt sulphate crystals and 1,000 tonnes of alloy-grade cobalt metal. The company previously planned to produce cobalt sulphate only.
COB described the change as a direct response to feedback from prospective offtakers, including rising interest from US-based customers and trading houses seeking high-purity cobalt metal for industrial and strategic applications.
While plant capital cost estimates remain unchanged at A$60 million, the company says the operational model retains flexibility to adjust feedstock and product mix as market conditions evolve.
The review comes as cobalt prices rebound sharply following a structural reset in 2025. The Democratic Republic of Congo (DRC) — the world’s largest supplier of cobalt — imposed a temporary export ban early this year to address oversupply, followed by a new quota system that will run until at least 2027. As a result:
- Cobalt hydroxide prices have climbed more than 300%,
- Cobalt sulphate is up roughly 240%, and
- Key benchmark prices have broadly risen 90%–300% across major cobalt products.
Cobalt metal price - Two phases of response to the DRC’s export controls.
These conditions underpin COB’s updated assumptions, which incorporate revised long-term consensus cobalt pricing and a slightly weaker AUD/USD exchange rate.
Progress towards final investment decision
Cobalt Blue says it made “strong progress” through 2025 towards a Final Investment Decision, securing:
- A Works Approval permit from the WA Government.
- A binding feedstock agreement with Glencore, covering cobalt hydroxide sourced from the DRC.
- Production of cobalt sulphate and metal samples meeting prospective customer specifications.
Remaining steps include finalising binding offtake agreements and assembling a funding package, with project financing work expected to advance through the first half of 2026.
Although early operations will rely on imported cobalt hydroxide due to idle Australian nickel operations, COB is assessing battery black mass from domestic recycling as a potential supplementary feed source.
Positioning for Australia’s midstream ambitions
The Kwinana facility represents the first dedicated cobalt refinery in Australia, intended to supply high-purity materials into the lithium-ion battery sector and defence-related alloy markets. Beyond KCR, COB continues to progress the Broken Hill Cobalt Project — recently granted a three-year extension to its Major Project Status — and ongoing technical programs through its Broken Hill Technology Centre.
Read more: Cobalt Blue sharpens focus on battery recycling with Broken Hill pivot