Australian Mines (ASX: AUZ) reports the Queensland government has offered conditional support to help the company’s Sconi cobalt-nickel-scandium project at Greenvale, inland from Townsville.
The company will receive an as-yet-undisclosed assistance package from the state’s Jobs and Regional Growth Fund with several conditions attached, including nailing down an offtake agreement by 30 September this year and then meeting staged achievements through to June 2024 to begin receiving financial assistance from the state government.
The project will involve an investment of $1.5 billion for a mine that will support around 700 jobs mining nickel and cobalt with the rare earths element scandium as a by-product.
Australian Mines said it intends to own and operate the entire process, from mining the ore through to producing the final battery-grade cobalt and nickel precursor chemicals, all on the one site in Australia.
In June, the company announced it had sent battery-grade cobalt sulphate and nickel sulphate samples to potential offtake partners.
The mine is projected to have an output of 46,000 tonnes per annum of nickel sulphate, 7,000tpa of cobalt sulphate and 74tpa of scandium oxide.
Sconi project to create more than 700 jobs
Queensland premier and trade minister Annastacia Palaszczuk, in announcing the proposed support, said the Sconi project will mean 500 jobs over a two-year construction period and 289 long-term positions once fully operational.
“Supporting this project supports North Queensland’s resources industry and supports North Queensland jobs,” she said.
Support package conditions
Apart from the requirement for an offtake agreement by the end of September, the planned assistance will be dependent upon delivering a detailed project execution plan also by that date.
By 31 December this year, Australian Mines will also have to obtain sufficient approved financing for the Sconi project and make its final investment decision, and to have appointed an engineering, procurement management contractor for the project.
The project’s construction will have to be completed by 30 July 2023 and employ 191 people on a full-time and ongoing basis by 30 June 30 2024.
Also by the latter date, Australian Mines will have to engage at least 57 full-time people as independent contractors.
If all of those conditions are met, the support package will be made available.
Australian Mines managing director Benjamin Bell said the government’s timetable and terms aligned with the company’s own expectations.
“We are making good progress in seeking to secure the offtake and financing agreements needed to access this funding,” he said.