Canadian government makes joint $10M investment in cobalt refinery
Once the refinery is completed, it will be North America's only producer of cobalt sulfate for the electric vehicle (EV) market.
Mining & Resources
VANCOUVER — Fuse Cobalt Inc. announces that on December 22 2020, the government of Canada and the government of Ontario announced a joint $10-million investment in the First Cobalt Corp. refinery in Cobalt Ontario. This refinery is located approximately 1500 m west of Fuse Cobalt’s cobalt mineral exploration property and inside the historic silver-cobalt producing region of Ontario.
Furthermore, on Jan 12, 2021, First Cobalt also finalized a new supply arrangement with Glencore plc along with a tentative pact with a unit of China Molybdenum Ltd, in which First Cobalt will receive 4,500 tonnes of cobalt hydroxide per year from the Democratic Republic of the Congo for use in its northern Ontario refinery beginning in 2022. This supply contract is significant for the region because it will assist the refinery to become fully operational, and once completed, it will be North America’s only producer of cobalt sulfate for the electric vehicle (EV) market.
Robert Setter comments, “Fuse has an offtake arrangement in place with Glencore Canada which we have mentioned many times in past news releases and public disclosure. Now that our neighbor appears to have a cobalt refinery just steps away from our mineral exploration properties, this can make the economics of cobalt refining significantly better for Fuse in the long run. We are happy for this key development in the area, and the advantage it offers to all cobalt explorers in the region.”
The $10 million investment will help accelerate the commissioning and expansion of the facility. The refinery is a hydrometallurgical cobalt refinery that 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 sulphate. Today, approximately 80 per cent of global supply comes from China and there is no production in North America.
Importantly, cobalt prices have started the year strongly, with Benchmark Mineral Intelligence saying the market was underpinned by strong fundamentals and tipping a “marginal deficit” by late 2021. Across all end markets, Benchmark Mineral Intelligence forecasts that cobalt demand will increase by 15 to 20 percent year-on-year, with the majority of this driven by the battery sector.