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Australian Mines to export largest sample of battery-grade cobalt and nickel sulphate

The company has signed an initial seven-year supply contract with Korea’s SK Innovation.
samples of battery-grade nickel and copper sulphate
Battery-grade nickel sulphate produced at a demonstration plant

Australian Mines Ltd (ASX: AUZ) will deliver the largest known shipment of battery-grade cobalt and nickel sulphates from Australian mined and processed ore.

A shipment of 40 kilograms of nickel sulphate and 4 kilograms of cobalt sulphate is being exported to offtake partner SK Innovation, a Korean-based industrial conglomerate.

The Korean company may use the product directly in its electric vehicle (EV) battery manufacturing process.

Shares up 8%

Shares jumped almost 8% to 9.6 cents in early trade.

Australian Mines managing director Benjamin Bell said the company had achieved a couple of significant firsts with the delivery of the samples.

He said it had also reinforced its position as a leader among resources companies looking to participate in Australia’s emerging battery materials sector.

Product exceeds SK Innovation specifications

The samples were produced at Australian Mines’ high-pressure acid leach and solvent extraction demonstration-size processing plant in Perth, Western Australia.

This was done utilising an industry standard processing flow-sheet with the process overseen by Australian Mines’ chief operating officer Tim Maclean.

It is the first time that battery-grade samples of these commodities have been produced without the use of third-party commercial laboratories.

The company achieved better than 98% purity for cobalt and 99% purity for nickel samples through the final crystallisation process at the demonstration plant.

READ: Australian Mines’ study indicates additional cobalt-nickel potential at Sconi project

These grades exceed SK Innovation’s specification for materials to be used directly in its manufacturing process for EV batteries, with the material requiring no additional processing or refinement ahead of its application.

This is another first for an Australian resources company.

Bell said that exceeding specifications for the material mined from Sconi and processed in Perth was an important step in the optimisation process for the project’s bankable feasibility study.

“[It] will also assist in the further advancement of project financing negotiations for the construction of the full-size processing plant in Queensland, which will use a replica processing flow-sheet to the demonstration plant.”

Initial seven-year supply contract

SK Innovation has signed a binding offtake agreement with Australian Mines for 100% of cobalt and nickel sulphate production from the Sconi Cobalt-Nickel-Scandium Project in North Queensland.

The agreement will run for an initial seven-year contract term and has an additional six-year extension option.

Under the supply agreement, SK Innovation will annually take up to 12,000 tonnes of cobalt sulphate and up to 60,000 tonnes of nickel sulphate following a ramp-up period.

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