The recommissioning of the First Cobalt refinery in Ontario edged forward this week, with the conclusion of a term sheet with TSX-V-listed company and global miner Glencore, detailing the framework for a fully funded, phased restart of the refinery.
The term sheet follows on a memorandum of understanding entered into between the companies in May this year and outlines a phased approach that could see the refinery operational in less than a year and expanded to 55 t/d in 2021.
Glencore would provide about $45-million for the recommissioning of the refinery, which First Cobalt said would provide the North American electric vehicle (EV) market with domestically refined battery-grade cobalt. It would also benefit North American cobalt projects, as an operating refinery in Ontario would significantly reduce the capital cost of putting a new mine into production.
Phase 1 entails a $5-million loan from Glencore to support additional metallurgical testing, engineering, cost estimating, field work, and permitting associated with the recommissioning of the refinery, including a definitive feasibility study for a 55 t/d refinery expansion.
Phase 2 envisions commissioning the refinery at a feed rate of 12 t/d in 2020 to produce a battery-grade cobalt sulphate for prequalification for the EV supply chain.
Phase 3 involves an expansion of the refinery to a 55 t/d feed rate by 2021, using the current site infrastructure and buildings. This final phase is contemplated in a report by Ausenco, announced in May, which estimates that First Cobalt could produce 5 000 t/y of contained cobalt in sulphate assuming cobalt hydroxide feed grading 30% cobalt.
“Transitioning to cash flow as a North American refiner is our primary focus and today’s news demonstrates that we are moving closer to achieving that objective. Glencore has been supportive throughout the process and we look forward to working closely with their technical team on a successful execution,” said First Cobalt president and CEO Trent Mell.
The First Cobalt refinery is the only permitted primary cobalt refinery in North America. The company recently completed testing of third-party cobalt hydroxide as a potential source of feed, confirming that the existing processes in the First Cobalt refinery are capable of producing a high-purity, battery grade cobalt sulphate. With no cobalt sulphate production in North America today, the First Cobalt refinery has the potential to become the first such producer for the US EV market.