PERTH (miningwekly.com) – A downstream prefeasibility study (PFS) into upgrading nickel sulphite concentrate into battery grade nickel has proven positive for ASX-listed Blackstone Minerals.
Blackstone on Monday noted that the PFS into a refinery at Ta Khoa, in Vietnam, had estimated that the project would require a capital investment of $491-million to support a refining capacity of 400 000 t/y, producing 43 500 t/y of refined nickel, generating revenues of some $14-billion over a ten-year operating life.
The project will also support average annual nickel/cobalt/manganese (NCM) precursor production of 85 600 t/y, and average annual copper by-product of 4 100 t/y.
The PFS estimated average annual operating cashflows of $451-million, with life-of-operation all-in costs estimated at $11 997/t NCM. The PFS estimated a post-tax net present value of $2-billion, and an internal rate of return of 67%.
First production is currently targeted for 2024, with the refinery project to ramp up to steady state production in the 2026 calendar year.
“The base case PFS financial outcomes are compelling based on an NCM precursor price forecast that is conservative compared to current observable market rates,” said Blackstone MD Scott Williamson.
“The internal rate of return on capital investment is exceptional for the base case, owing to very low capital intensity, a significant premium available when upgrading nickel sulfide concentrates into battery grade NCM precursor, and the competitive operating advantage in Vietnam, which includes access to low-cost renewable hydro power.”
Blackstone told shareholders on Monday that the company’s decision to proceed with the development of the refinery was contingent on a number of factors, including future exploration success at the Ta Khoa mine, the ability to secure offtake for the refinery product, and consumer demand for battery-grade NCM precursor.
The company intends to fund the development of the refinery through a collaborative partnership-based model, with Blackstone to retain a significant interest in the refinery, with its share of project funding to be met through a combination of debt, equity and offtake financing.
Blackstone has started funding discussions with multiple potential partners, including NCM consumers and concentrate suppliers to participate in the funding of the proposed refinery. In the meantime, the ASX-listed company has started progressing approvals to start the next phase of definitive feasibility studies and pilot plant testing, with a final investment decision on the refinery targeted for 2022.