COBALT SUPPLY CHAIN
The cobalt supply chain, from mine production to intermediates and finished product, has rapidly transformed over the past several years in response to the electric vehicle market
Photo by: Bloomberg
Cobalt producer eCobalt Solutions has identified the potential to increase the targeted production rate to 1 200 t/d from 800 t/d, an increase of 50% compared with the previous mine plan, at its Idaho cobalt project, located near the town of Salmon in east-central Idaho, in the US.
The project is the only environmentally permitted, primary cobalt project in the US and has the potential to become a reliable and transparent source of cobalt in the face of rapidly growing demand for the metal.
The 1 200 t/d mine plan with improved economies of scale should create a more resilient project economic plan that can withstand the volatility of the cobalt market experienced recently. A larger and more robust plan will further elevate eCobalt’s position in the cobalt market.
“Although the cobalt market has been quite volatile over the last 12 months, the importance of this commodity in the impending electric vehicle (EV) revolution has not waned. “Prices for cobalt are still expected to strengthen beyond 2020, aligning well with when we expect our product to reach the market,” says eCobalt president and CEO Michael Callahan.
The company had taken a look at the work that was in progress on the project’s feasibility study and rigorously tested all the assumptions to determine whether a larger and stronger plan could be developed.
The result of this work demonstrated that the incremental cost of retrofitting the mill to process more tonnage is supported by considerably stronger economies of scale, while having no expected impact on the approved plan of operations.
“This plan would allow us to produce more cobalt earlier, thereby increasing cash flows early in the mine life, improving payback and overall project economics,” notes Callahan.
eCobalt is working with mineral industry consultants Micon International to finalise the feasibility-level study for the 1 200 t/d mine plan. The change in targeted production rate is not expected to significantly delay achieving full production and will not require any adjustments to the planned surface disturbance of the mine and mill, therefore changes to eCobalt’s permits, which comprise the approved plan of operations are not expected.
The cobalt supply chain, from mine production to intermediates and finished product, has rapidly transformed over the past several years in response to the EV market. The pilot-level testwork along with ongoing market developments have provided critical information needed to refine the list of potential offtake partners.
With the objective to produce a concentrate with the lowest processing cost to be sold at attractive terms, samples have been sent to the list of potential partners. eCobalt has received positive feedback from these parties demonstrating that the Idaho cobalt project concentrate is desirable, owing to its clean and ethical production as well as its high cobalt and copper content.
As there is no equivalent or benchmark concentrate in the market, thorough testing by refineries is required to obtain final concentrate specifications and commercial terms. Testing and analysis of the Idaho cobalt project cobalt concentrate samples is currently under way by these parties. As final concentrate specifications may affect downstream processing, additional guidance on the project development timeline will be provided once final indicative terms have been agreed.
Work required over the next several months to complete the feasibility study with the new targeted production rate includes adjusting the mining sequence, schedule and costing for 1 200 t/d, completing the engineering to expand the mill to 1 200 t/d, obtaining quotes to bring these cost estimates to feasibility level, and defining final concentrate specifications based on competitive commercial terms for offtake.
“eCobalt has evolved with a continued focused on creating value for all stakeholders. We are committed to our shareholders, to our communities and to our industry peers to be driven by a dedication to operational excellence and risk management by our team of technically driven, seasoned professionals,” Callahan states.
He adds that, with a stronger plan in place, the company is better positioned to capitalise on the ever-growing market for cobalt even amid volatility and market uncertainty.
“All of the work that has been achieved, paired with what we have observed in the international market, positions us to advance quickly to create this value for the long term,” he concludes.