The behind-schedule Sunrise battery materials complex, in central New South Wales, Australia, will be ready for a final investment decision (FID) by the middle of next year, owner CleanTeQ said on Friday, announcing that the project would transition to a conventional engineering, procurement and construction management (EPCM) execution approach.

The ASX- and TSX-listed company explained that the project was behind schedule because it had not been able to agree on a number of design, procurement, contracting and project execution matters with contractor Metallurgical Corporation of China (MCC).

As a result, the parties had agreed to terminate the MCC front-end engineering design services agreement and the engineering, procurement and construction heads of agreement.

“The project is best served by a delivery model that provides Clean TeQ with a higher degree of control over key aspects of project execution and management,” the project developer said.

Under an EPCM, Clean TeQ would select a contractor to provide management services for the project, oversee the appointment of subcontractors to supply major plant and equipment packages and construct the process plant and associated project infrastructure. 

The company said that the EPCM model would tightly manage the cost and schedule risk by delivering about 65% of the cost of the process plant by subcontractors and vendors under fixed price contracts, with performance guarantees on the packages.

Fluor Australia, as the Sunrise project management contractor, would deliver a comprehensive project execution plan. Fluor is already engaged on engineering activities for the project and has been part of the integrated engineering team working with MCC in Beijing for the past four months.

The scope of work for the integrated Fluor and Clean TeQ team includes systematic collation and review of all the feasibility, engineering and project development work undertaken for the project to date.

The project execution plan would include an updated capital cost estimate for the project, incorporating input from design engineering work to date, and a revised master schedule for the engineering, procurement, construction and commissioning of the project.

Prior to making a FID, Clean TeQ would select an EPCM contractor for the engineering, procurement and construction phase of the project.

A FID is subject to financing and Clean TeQ reported that there was global interest in the project, which is one of the largest, lowest-cost and development-ready nickel/cobalt projects in the world.

In June, Clean TeQ announced that it had appointed Macquarie Capital to run a partnering process for the Sunrise complex. The decision to commence the partnering process followed numerous inbound enquiries from a range of parties in the electric vehicle supply chain in relation to both project level ownership, long-term offtake and other financing arrangements.

Strong metal price movements in recent months - with nickel prices up 45% over the past year and cobalt up around 40% from recent lows - has prompted increasing interest from the battery and automotive supply chains seeking to identify and secure long-term sourcing options for battery-grade nickel and cobalt sulphate, starting within the 2023 to 2025 timeframe.