Key Milestone For American Refinery
First Cobalt Corp. (TSXV: FCC) has signed long-term cobalt hydroxide feed arrangements with Glencore AG and IXM SA, a fully owned subsidiary of CMOC, which will provide a total of 4,500 tonnes of contained cobalt per year to the First Cobalt Refinery commencing in 2022.
President and CEO, Trent Mell, said that once operational, the First Cobalt Refinery will be North America’s only producer of cobalt sulphate for the electric vehicle market.
- 4,500 tonnes per year of contained cobalt to be provided from Glencore’s KCC mine and CMOC’s Tenke Fungurume mine
- Supply agreements represent 90% of projected capacity for the Canadian refinery, yielding 22,250 tonnes per year of battery grade cobalt sulfate
- Securing long term feed from two of the highest quality cobalt hydroxide operations in the world supports First Cobalt’s strategy of producing the world’s most sustainable cobalt for EVs
- First Cobalt’s commitment to CIRAF and RMI reporting standards and lifecycle assessment reporting is in line with the Paris Agreement and provides European and North American markets with an attractive regional supply of ethically sourced cobalt for zero emission vehicles
- Offtake discussions, financing and permitting are on schedule, supporting commencement of construction in mid-2021
“This is a pivotal moment for our North American cobalt refining strategy,” Mr Mell said.
“Our globally competitive cost structure and industry-leading ESG credentials put us in a strong position for a rapidly growing EV market. With feedstock arrangements in place, we can continue to advance our vision to create a new cobalt supply chain in North America.
“Electric vehicle sales in Europe were up more than 100% in 2020 and the U.S. will be the next large market to take off. We are now focused on offtake arrangements and the financing package with the goal of commencing construction in mid-2021 and full commissioning in the second half of 2022.”
Under the terms of a binding cobalt hydroxide supply contract, Glencore AG will supply the First Cobalt Refinery from the KCC mining operation in the Democratic Republic of Congo for five years, commencing in Q4 2022. First Cobalt has also signed a memorandum of understanding with IXM S.A. for cobalt from CMOC’s Tenke Fungurume mining operation in the DRC over the same time period. The Company and IXM will work to complete a definitive contract.
Cobalt hydroxide will be purchased at prevailing market prices, providing First Cobalt investors with exposure to the cobalt market and, by extension, a growing EV market.
Together the arrangements will provide 90% of the Refinery’s annual contained cobalt capacity of 5,000 tonnes per annum. The company plans to purchase an additional 500 tonnes per annum of feed at a later date through contract or spot market purchases.
The supply agreements and commencement of shipments are conditional on First Cobalt obtaining the necessary permits and a working capital facility. Offtake discussions, financing and permitting are on schedule, supporting commencement of construction in mid-2021.
In December 2020, the Government of Canada and the Government of Ontario announced a joint C$10 million investment in the First Cobalt Refinery, which will help accelerate the commissioning and expansion. The First Cobalt Refinery is a hydrometallurgical cobalt refinery located north of Toronto, in the community of Temiskaming Shores.
The facility was permitted in 1996 with a nominal throughput of 12 tonnes per day and operated intermittently until 2015, producing cobalt, nickel and silver products. In May 2020, the Company completed an engineering study that confirmed the Refinery’s suitability to treat cobalt hydroxide at an expanded throughput of 55 tonnes per day to produce a high purity, battery grade cobalt sulfate.
Today, approximately 80% of global supply comes from China and there is no production in North America.