The First Cobalt refinery
TSX-listed cobalt refiner and miner First Cobalt has entered into long-term cobalt hydroxide feed arrangements with diversified miner Glencore and IXM SA − a fully owned subsidiary of China Molybdenum Company (CMOC) − to provide 4 500 t/y of contained cobalt to the First Cobalt Refinery from 2022.
Once operational, the First Cobalt refinery will be North America’s only producer of cobalt sulphate for the electric vehicle (EV) market.
Under the terms of a binding cobalt hydroxide supply contract, Glencore will supply the First Cobalt refinery from the Kamoto Copper Company mining operation in the Democratic Republic of Congo (DRC) for five years, commencing in the fourth quarter of 2022.
First Cobalt has also signed a memorandum of understanding with IXM SA for cobalt from CMOC’s Tenke Fungurume mining operation in the DRC over the same time period. First Cobalt and IXM SA will work to complete a definitive contract.
Cobalt hydroxide will be bought 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 yearly contained cobalt capacity of 5 000 t/y.
The company plans to buy an additional 500 t/y 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.
First Cobalt president and CEO Trent Mell says this is a pivotal moment for the company’s North American cobalt refining strategy. “Our globally competitive cost structure and environment, social and corporate governance (ESG) credentials put us in a strong position for a rapidly growing EV market.”
He says that, with feedstock arrangements in place, First Cobalt can continue to advance its vision to create a new cobalt supply chain in North America.
“EV sales in Europe were up more than 100% in 2020 and the US 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.”
In December 2020, the government of Canada and the provincial government of Ontario announced a joint $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 t a day and operated intermittently until 2015, producing cobalt, nickel and silver products.
ESG IMPACT
First Cobalt claims to be committed to implementing decarbonisation strategies in line with the Paris Agreement.
As such, an independent life cycle assessment completed in 2020 confirmed the low carbon footprint of its Canadian refinery. The report concludes that the environmental impacts associated with refining cobalt at First Cobalt’s facility will be materially lower than the published impacts of other leading refiners.
In particular, the carbon footprint generated through the production of 1 kg of cobalt sulphate from First Cobalt’s production process is projected to be 50% lower than the benchmark cobalt facility.