First Cobalt achieves production of battery grade cobalt

Canadian-based pure-play cobalt company First Cobalt (ASX: FCC) has reached a major milestone after producing a battery grade cobalt sulfate using its refinery flowsheet.

The company’s Ontario refinery, which has the potential to produce either a cobalt sulfate for the lithium-ion battery market or cobalt metal for the aerospace and military industries, is currently the only permitted primary cobalt refinery in North America.

The test work was able to conclude that processing cobalt hydroxide feed wouldn’t require the reactivation of the refinery’s autoclaves, providing an opportunity for increased production of up to 2,000 tonnes of cobalt in product per annum.

The refinery process, which achieved 99.9% purity, resulted in product assaying 20.8% cobalt, surpassing the reference grade for sulfate pricing.

Commenting on the milestone, First Cobalt president and chief executive officer Trent Mell said it brought the company a step closer to recommissioning the cobalt refinery.

“Third party studies have confirmed that the permitted facility could be recommissioned in 18-24 months,” he said.

“Furthermore, the cobalt hydroxide used in these tests is currently sold at approximately 60% of the prevailing cobalt price which could offer good margin opportunities based on the findings of the previously released restart study.”

Commissioned in 1996, First Cobalt’s refinery is located just a few hours north by road or rail from the US border.

Once operational, the hydrometallurgical cobalt refinery will become the only North American producer of refined cobalt for the North American electrical vehicle market.

First Cobalt remains upbeat on the fundamentals for the EV market in North America, with company director Henrik Fisker noting that demand is growing for companies which are continuing to introduce new and affordable models to the market.

Importantly, the company revealed it had received significant interest from miners and automotive companies with the new results prompting discussions to advance to the next stage.

Refinery re-start

First Cobalt’s aim is to secure a long-term feed purchase agreement for the sale of refined cobalt and bed down financing for the capital requirements.

At a base case 24 tonne per day feed rate and using the current flowsheet, the capital cost of the restart is estimated at US$25.7 million. Annual operating costs under the base case stand at US$6.8 million.

The company is already making headway on financing arrangements for the re-start, which include exploring several non-dilutive financing options.

In parallel with securing financing, the next step towards a potential restart of the refinery will include detailed engineering to assess further refinements to the flowsheet to maximise potential output.

Investors reacted positively to the news, sending First Cobalt’s shares soaring 32.2% to $0.205 at midday.