Pure Minerals is putting together the building blocks of the Townsville Energy Chemical Hub (TECH) project to make battery specialty chemicals, based on imported ore from New Caledonia. As those building blocks come together, the market’s line of sight on the cost of construction and planned performance will be clearer, and the project itself will be de-risked. We expect that shareholders will benefit from that process.
The project has a similar capital intensity (~US$58,000/tpa nickel capacity) to competing HPAL nickel projects, but its entry level cost of A$513M is 15% the HPAL entry level cost.
Funding of such a capital spend will require a major offtake partner to buy into the project. Such a buy-in is likely to be the most important re-rating catalyst from the shareholders’ point of view, and because this project is designed to produce specialty chemicals for sale directly to battery makers, and has a eco-friendly credentials, it is much more likely to attract a strategic partner from the battery or automobile manufacturing sector than would an HPAL.
The project management team under John Downie have extensive experience in the processing of nickel laterite ores (Queensland Nickel, Goro Nickel Project, and Gladstone Nickel Project), and are strongly incentivised to deliver a project by the end of CY2022.