Cobalt Blue secures feedstock supply from Glencore for Australia’s first cobalt sulphate refinery

Cobalt Blue Holdings (ASX: COB) and mining giant Glencore International have signed an agreement for the provision of cobalt hydroxide feedstock to the ground-breaking Kwinana cobalt refinery (KCR) in Western Australia.

The KCR will be Australia’s first cobalt sulphate refinery and a key component in the country’s domestic critical minerals development plans, with the capacity to produce cobalt metal for industrial applications such as magnets and superalloys for aerospace and defence.

Cobalt Blue and partner Iwatani Australia (IWA) are jointly developing the Kwinana refinery to supply cobalt products to global lithium-ion battery manufacturers and others for industrial and defence applications.

Supply agreement

Under the new contract, Glencore will supply Cobalt Blue with up to 50% of KCR’s feedstock requirements for a period of three years following the start-up of commercial operations at KCR.

“We are thrilled to formalise a relationship with Glencore—locking in at least 50% of KCR’s feedstock requirements is a significant step in de-risking the project that brings us closer to a final investment decision,” chief executive officer Andrew Tong said.

“Developing a commercial partnership with one of the world’s largest diversified miners helps solidify Cobalt Blue’s position as a participant in the global cobalt industry.”

“This relationship will also enable us to play a strategically important role in building new battery and critical minerals supply chains among like-minded countries.”

Contract details

KCR’s base case for stage 1 involves processing 3,000 tonnes per annum of cobalt as cobalt sulphate and 500tpa of nickel as nickel metal, aiming to produce raw ingredients for the precursor cathode active material industry.

Cobalt Blue will source the feedstock from Glencore’s Kamoto Copper Company and Mutanda Mining operations in the Democratic Republic of Congo.

Mr Tong said Cobalt Blue was in advanced discussions to fulfil the refinery’s remaining requirements with other suppliers of cobalt feedstock both in Australia and internationally.

The KCR will be located at IWA’s property in the Kwinana-Rockingham industrial precinct, with the site’s proximity to Fremantle port a benefit for importing third-party feedstock and exporting finished products in shipping containers.