QPM strikes partnership deal with SMT

17th July 2023 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH (miningweekly.com) - ASX-listed Queensland Pacific Metals (QPM) has struck a partnership agreement with New Caledonian ore supplier Société des Mines de la Tontouta (SMT).

Under a memorandum of understanding (MoU) the two companies will work towards forming a strategic parentship to expand both of their separate business interests.

The MoU follows a binding offtake agreement between the two companies last year under which SMT will supply up to 600 000 t/y of nickel ore for QPM’s Townsville Energy Chemicals Hub (TECH) base metals project, in Queensland.

“I am delighted to extend our current supply relationship with SMT into a broader strategic partnership which encompasses the framework for cooperation to deliver even greater value to both companies,” said QPM MD and CEO Dr Stephen Grocott.

“SMT has been a strong supporter of the TECH project for a long time and this MoU is a natural extension of our current collaboration. It is intended to assist QPM in underpinning the ore supply for not only Stage 1 but also Stage 2 and provide a pathway for SMT to participate in the value created through development of the TECH project.”

The Stage 1 TECH project is based on a nameplate capacity of a 1.05-million-tonne-a-year throughput rate, with a ramp-up time of 2.25 years and a design life of 30 years. The Stage 1 project will produce 15 992 t/y of nickel sulfate, 1 746 t/y of cobalt sulfate, 607 395 t of hematite pellets, 4 000 t/y of aluminium, and 28 856 t of magnesium oxide.

Under the strategic partnership agreement, the two companies will collaborate on investment opportunities that will allow both companies to participate in the value created from processing ore into battery chemicals and on additional ore supply beyond the term of the existing agreement.

The two companies will also collaborate on future mine development required by SMT to support additional ore supply.

“Signing a nickel ore supply contract with QPM means renewing relations with Australia, which has always been a historical partner of SMT and New Caledonia. Indeed, exports between SMT and Australia have taken place over a period of more than 25 years, from 1989 until recently in 2015,” said SMT GM Arnaud Bondoux.

“SMT was involved in QPM's innovative project from the outset by actively participating in the pilot tests. In fact, QPM and SMT have been in contact for four years now and have formed a partnership that led to the signing of a first MoU in 2017. SMT intends to make a long-term commitment to QPM, beyond its role as a supplier, in order to propose a new model for the valorization of New Caledonian ore.”

Meanwhile, QPM on Monday also told shareholders that it was hoping to finalise the Moranbah acquisition by the end of this month.

The company earlier this year struck a deal with Arrow Energy Group and AGL Energy to acquire the Moranbah gas project and the North Queensland energy joint venture.

The two projects, collectively known as the Moranbah project, will provide QPM with an established coal mine waste gas project with a 240 PJ of 2P reserve and existing infrastructure with a processing capacity of up to 30 PJ/y.

The project has been in production since 2004 with current gas production sourced from approximately 100 operated wells across four petroleum leases and waste mine gas supplied from five active coal mines in the region.

QPM said on Monday that the company is expected to receive net cash of A$30-million on completion of the acquisition, with Moranbah forecast to generate positive earnings before interest, taxes, depreciation and amortisation through 2024, based on production, operating and electricity price assumptions.

Moranbah is expected to provide a long-term, economically sustainable gas project for the TECH project, avoiding exposure to the extreme price volatility in the Eastern gas markets.