The Nico cobalt/gold/bismuth/copper project, in Canada’s Northwest Territories, is among several advanced critical minerals projects in the country that could be fast-tracked to production stage with some government assistance, says developer Fortune Minerals.
Fortune president and CEO Robin Goad says Canada’s position as a global leader in the mining industry and its vast endowment of natural resources positions the country as a significant supplier of responsibly sourced critical minerals – which are crucial to the global push to electrify mobility using lithium-ion batteries.
About three-quarters of global lithium-ion battery cell manufacturing capacity is in China, supported by Chinese control over the raw materials and processing needed to produce the chemicals used in these batteries, he adds.
“With respect to the cobalt in battery cathodes, China controls about 50% of the Democratic Republic of Congo’s (DRC’s) cobalt mine supply. The DRC is responsible for more than 70% of the world’s mined cobalt production. China also controls more than 60% of global cobalt refining capacity and 80% of cobalt chemical supply.”
On the back of critical minerals supply being threatened by US-China trade friction last year, the US and Canada, an important producer of critical minerals, agreed to work together on a solution to mitigate the risk of supply chain disruptions, finalising the Joint Action Plan on Critical Minerals Collaboration in December last year.
Fortune has been in discussions with Natural Resources Canada to determine how the Canadian government can help support the rapid development of Nico, as well as the country’s other critical minerals projects to support the Joint Action Plan.
“Fortune has identified the need to have a less cumbersome, more efficient and predictable regulatory process, as well as greater alignment on strategic national interests among the different levels of government and between government departments,” says Goad.
Government could also play a role in the development of projects by providing financial assistance similar to that of the Germany’s UFK united loan guarantee scheme for the acquisition of raw materials and Finland’s support for the buying of Finnish-manufactured mining equipment.
One aspect where government funding is vital in Canada is in the processing of critical minerals, Goad highlights, noting that projects are unable to process their concentrates at many of the country’s existing conventional downstream smelters and refineries.
He tells Mining Weekly that most critical mineral projects in Canada must, therefore, fund their own vertically integrated downstream processing plants, potentially doubling the capital costs of proposed developments.
“Many deposits may not have the grade or critical mass needed to justify this additional investment,” adds Goad.
Therefore, he suggests that the different levels of government align on national strategies and financial support for downstream processing plants in Canada.
“This would not only support advanced development assets, such as Nico, but would also improve the economic viability of earlier-stage projects,” states Goad.
He emphasises that more value-added processing would also strengthen the Canadian economy and the resultant stability in the raw-material supply chain would drive investment in manufacturing facilities. A stable primary source of concentrates would also enable plants to diversify into toll processing and recycling.
“Fortune is looking at new sites for Nico’s downstream processing plant, including two brownfield plants with existing facilities to help reduce the capital costs for the refinery,” states Goad.
Nico, which has environmental assessment approval to construct a mine and concentrator, has significant cobalt and bismuth ore reserves. The more than one-million ounces of gold in its reserves offer a highly liquid revenue stream to mitigate cobalt and bismuth price volatility.
Fortune is working on increasing grade and gold contribution from the deposit and reducing the capital costs of production facilities.
Consequently, Nico’s geological model is being improved by constraining the ore boundaries further to reduce internal and external dilution, and the smearing of grades into areas with low grades.
“A new mine plan, similar to that used in Nico’s 2014 feasibility study, will be developed based on the geological model and will include openpit and underground mining during the early years of the mine life to accelerate access to gold-rich ores located deeper in the deposit.”
Further, process improvements identified in previous work assessing a 6 000 t/d processing capacity will be incorporated into a new study, while the mine’s construction schedule will be aligned with the availability of the Tlicho all-season road to reduce capital costs and supply chain risks.