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Queensland Pacific Metals advancing Townsville Energy Chemicals Hub on multiple fronts

The TECH Project is envisaged to be a modern and sustainable producer of critical chemicals for the emerging lithium ion battery and electric vehicle sector.

2022-01-27-15-53-12-0a8751a37c4ffa9127d6517a2359aaad

Queensland Pacific Metals Ltd (ASX:QPM) is advancing the definitive feasibility study (DFS) for the Townsville Energy Chemicals Hub (TECH) Project in North Queensland, with a focus on value engineering, critical vendor engagement and process optimisation.

The DFS, scheduled for mid-2022, is aimed at demonstrating robust financial returns and reducing the technical risk associated with the commercial scale-up of the DNi Process, which is an environmentally friendly process for extracting metals from laterite ores.

Overview

The TECH Project is envisaged to be a modern and sustainable producer of critical chemicals for the emerging lithium-ion battery and electric vehicle sector. 

​High-grade nickel laterite ore will be imported from New Caledonia from a number of ore supply partners with long-established mining operations. 

Ore will be unloaded at the Port of Townsville and transported by either road or rail to the TECH Project site at Lansdown.

Initially, the ore will be processed in a processing plant that utilises the DNi Process™.

Korean presidential visit to Australia

In December 2021, His Excellency the Republic of Korea President Moon Jae-In, Minister for Trade, Investment and Energy Moon Sung-Wook and other delegates travelled to Australia to commemorate the 60th anniversary of diplomatic ties between Australia and Korea.

As part of the visit, critical mineral supply was a key agenda item and a Memorandum of Understanding (MOU) on Cooperation in Critical Mineral Supply Chains was executed between the two countries.

This MOU recognised the opportunity where the Australian and Korean governments and investors can work together to deliver an integrated approach to critical mineral supply chain security.

As part of discussions on critical minerals, the Australia Korea Business Council (AKBC) hosted a meeting with President Moon Jae-In and three Australian critical mineral companies, one of which was QPM.

QPM Managing Director Stephen Grocott was given the opportunity to present QPM and the TECH Project at the meeting.

His speech highlighted QPM’s partnerships with LG Energy Solution and POSCO, its global leading sustainability credentials and the importance of green nickel and cobalt supply for the electric vehicle sector.

Life cycle assessment – negative carbon footprint

The TECH Project will be a high consumer of energy and QPM’s preferred source is waste mine gas.

One of the key advantages of the Lansdown site is the largely unutilised North Queensland Gas Pipeline, which transports gas from the Northern Bowen Basin to Townsville and runs past QPM’s eastern boundary.

The Bowen Basin is home to some of the world’s highest quality hard coking coal (HCC) mines.

These HCC mines are extremely gassy and contribute significantly to Australia’s greenhouse gas emissions, in particular methane which was a key focus of the UN Climate Change Conference (COP26) held in November 2021.

Methane is 25x worse than CO2 for global warming and at COP26, more than 100 countries signed up to the Global Methane Pledge to reduce methane emissions by 30% by 2030.

QPM’s gas procurement strategy is to target waste gas from existing HCC mines.

Under the ISO Life Cycle Analysis standards, by using this waste gas in its processing, QPM receives an offset against its carbon emissions calculation.

This offset is very significant when the gas (methane) would have otherwise been a fugitive emission directly into the atmosphere.

A$250 million debt funding

In December, QPM received conditional finance support from Export Finance Australia (EFA) to secure up to A$250 million in debt funding for the TECH Project.

The EFA will now begin detailed due diligence on the TECH Project in line with its mandate to provide financial expertise and solutions to support Australian businesses across a variety of industries, including critical minerals.

EFA also administers the Australian Government’s A$2 billion Critical Minerals Facility, which helps critical minerals projects to get them off the ground.

This marks the second expression of interest from an Australian Government entity, following the Northern Australian Infrastructure Facility (NAIF) informing QPM that its TECH Project has progressed through the NAIF’s strategic assessment phase.

Both NAIF advice and this letter of support from the EFA highlights that the TECH Project is broadly aligned with the objectives of the Australian Government’s Critical Minerals Strategy – to diversify global critical mineral supply and capture more value from the critical minerals value chain.

High purity alumina update

During the December 2021 quarter, QPM executed a License Heads of Agreement with Lava Blue relating to the use of their proprietary technology for high purity alumina (HPA) processing.

Lava Blue’s technology is based around the conventional hydrochloric acid leach, which was the base case for QPM.

Lava Blue’s technology centres around the ability to deal with trace impurities, process control and demonstration plant confirmation of designs.

The first phase of the partnership involved QPM supplying Lava Blue with aluminium chloride, the precursor to HPA which was produced from aluminium hydroxide yielded from QPM’s pilot plant.

Lava Blue was successful in producing 4N HPA at a lab-scale, with the product assaying at 99.996% purity.

Well-funded

In December 2021, QPM completed a capital raising of $30 million by way of a share placement to institutional and sophisticated investors at $0.16 per share.

The placement was strongly supported and allowed QPM to introduce new investors to the share register, including those with an ESG focus.

Cash at the end of the quarter was $47.1 million.

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