Cobalt Blue Holdings Ltd (ASX:COB) (OTCMKTS:CBBHF) (FRA:COH) will complete construction of its Pilot Plant in Broken Hill before Christmas with the first production of cobalt samples expected in February 2021.
Development of this plant is shifting from design into tender and construction with long lead items received over the course of the year.
Construction will be followed by a commissioning period with the company about to begin the local hiring of plant personnel.
“Long and fruitful relationship”
In an update, the company’s CEO Joe Kaderavek said: “COB looks forward to continuing our long and fruitful relationship with the Broken Hill community.”
The aim of the Broken Hill Pilot Plant is to prepare cobalt samples to satisfy raw material standards for global battery makers.
These samples will be prepared from a large amount of core from the Broken Hill Cobalt Project (BHCP).
COB has cobalt sample partners from Japan, Korea, India, Europe and Australia representing a strong selection of cathode precursor/battery makers, cobalt trading houses and mining companies.
It expects to increase the size of this partner group as the project progresses.
A 3D impression of the plant.
Larger plant to follow
The company intends to follow the Pilot Plant with a larger-scale Demonstration Plant later in 2021 with the overall investment to inform a feasibility study for the BHCP which is due for delivery in mid-2022.
Kaderavek said: “The resulting large-scale samples will also allow us to begin qualification of our cobalt products within the downstream battery industry.
“For a new supplier, this process can take over 12 months.
“Pre-qualification represents a challenge for any new entrant but success will allow COB to then create binding offtake contracts required by lending institutions.
“Further, COB is actively considering opportunities to form project partnerships that will assist with completion of the feasibility study, financing packages and ultimately implementation of the BHCP.”
The CEO said: “Our strategy is for the BHCP to produce an intermediate Mixed (cobalt-nickel) Hydroxide Product (MHP) which can be further refined on-site to high-purity battery-ready cobalt sulphate.
"There is potential for the MHP to be refined off-site and COB is exploring opportunities to participate in the battery value chain through co-location of MHP refining and precursor production."
Positive about future market
In regard to the future of cobalt-based lithium-ion batteries, Kaderavek said: “We believe that the battery market is a large heterogenous market where no one technology dominates.
“Within the electric vehicle (EV) market, there are multiple segments where different lithium-ion battery chemistries will prevail.
“Cobalt is a staple for most of these segments, with the exception of smaller/lower cost/shorter-range EVs with battery sizes typically below 25 kWh size.
"Today, for most long-range/mass-market EVs cobalt is an essential component in lithium-ion batteries, with non-cobalt based technologies unlikely to be commercialised in the foreseeable future.
"As an incoming, large-scale, ethical cobalt producer our view is that the move to a cobalt-free EV battery places battery operating stability at risk and is based on slender economic benefits.
"We believe cobalt-free batteries are an aspirational goal only."
Belief that prices will strengthen
He said COB’s plans reflected a strong belief that cobalt prices will strengthen over the coming few years.
“We intend to be well-positioned to be ready at a time the cobalt market will require the development of a major new cobalt mine, in a low political risk jurisdiction with well-established infrastructure."