Cobalt Blue Holdings Ltd (ASX:COB, OTC:CBBHF) has been awarded A$15 million by the Australian Government, subject to conditions, for the Broken Hill Cobalt Project (BHCP), as part of the Critical Minerals Accelerator Initiative (CMAI).
The BHCP is the only large-scale, ex-African, greenfield primary cobalt project globally and a top-five cobalt project (ex-Africa). BHCP production will lift Australia into the top three global cobalt producers.
Funding will accelerate development
CMAI funding will enable COB to accelerate the development of the project at Broken Hill by expanding the scope of feasibility studies, bringing forward infrastructure and services work packages and decreasing start-up commissioning risks.
The funding follows on the heels of an allocation of Major Project Status, providing strong support for COB to commercialise the first Australian cobalt sulphate refinery.
To access the funding, COB is required to enter into a grant agreement with the government, which includes standard industry grant conditions such as reporting requirements and using grant monies only on eligible project expenditure.
Recognition of strategic importance
Cobalt Blue chairman, Rob Biancardi said: “The Broken Hill Cobalt Project has received a significant boost by being awarded $15 million via the Australian Government’s Critical Minerals Accelerator Initiative.
"We applaud the Australian Government’s support in assisting mid-stage critical minerals projects overcome the substantial technical, regulatory and financial barriers for the establishment of greenfield projects such as the BHCP.
“This grant, in conjunction with the recent Major Project Status award, is further recognition of the strategic importance of the BHCP in delivering supply chain security and enhanced sovereign capacity in the high-tech minerals refining space, as well as significant capital investment and employment generation in regional Australia.”
Australian Critical Minerals Strategy
Australia’s Critical Minerals Strategy outlines the government’s policy framework for the critical minerals market.
Key priority areas include:
- Growing Australia’s critical minerals resource knowledge base and moving into downstream processing, to contribute to growing global demand for critical minerals;
- Providing incentives for innovation to lower costs and increase competitiveness; and
- Economic development and jobs growth in regional communities.
The government is providing additional financial support to help strategic early and mid-stage projects to overcome technical and market barriers.
The CMAI supports projects through vulnerable points in the development process to help accelerate them towards a point at which they are sufficiently advanced to seek financing, including under a $2 billion critical minerals loan facility.
Objectives of the CMAI are to:
- Help Australian critical minerals projects contribute to supply chains of strategic importance; and
- Support and lower the risk associated with critical development activities to help progress towards offtake qualification and seeking debt financing to proceed to production.
Alignment with Critical Minerals Strategy
The BHCP will significantly add to the sovereign capacity of Australia, by:
- Doubling Australia’s cobalt production from 3,500 tonnes per annum to 7,000 tonnes per annum;
- Building the first Australian cobalt refinery to produce cobalt sulphate;
- Enabling development of a downstream battery industry, through supply of cobalt sulphate as a raw material into a Precursor Cathode Active Material plant;
- Lowering the economic hurdle for additional (primary and secondary) cobalt supply by providing an intermediate to cobalt sulphate refining capacity;
- Making COB the first domestic producer of elemental sulphur, with potential to displace up to a third of national imports; and
- Providing up to 400 FTE regional jobs in critical minerals for the 20+ year duration of the project, with a significant socio-economic multiplier effect.