Pure Minerals secures offtake deal with LG Chem for TECH nickel-cobalt project
Due to LG Chem’s demand exceeds Pure Minerals’ initial plant capacity, both parties will evaluate the potential of increasing the size of the proposed Townsville Energy Chemicals Hub project.
Aspiring battery chemicals producer Pure Minerals (ASX: PM1) has entered into an agreement with South Korean company LG Chem for the supply of nickel and cobalt offtake from the Townsville Energy Chemicals Hub (TECH) project, which is wholly-owned by Pure Minerals’ subsidiary Queensland Pacific Metals.
LG Chem is the largest diversified chemical company in Korea and a major manufacturer of lithium-ion batteries for electric vehicle and other markets.
It is seeking to purchase up to 10,000 tonnes of contained nickel and approximately 1,000t of contained cobalt from TECH, in a combination of mixed hydroxide precipitate and final battery chemical sulphate over a term of up to five years.
LG Chem will also consider assisting the project’s financing by way of a prepayment.
Exceeding capacity
LG Chem’s demand exceeds the capacity of the plant originally considered in the TECH pre-feasibility study released in March, which would have an annual production of approximately 6,000t contained nickel and 650t contained cobalt.
Pure Minerals has agreed to evaluate the possibility of increasing the scale of the TECH project to meet the greater demand.
This will include provision of LG Chem specification requirements and testing by LG Chem of product samples produced in upcoming pilot plant activities.
Larger-scale benefits
Pure Minerals chief executive officer Stephen Grocott said a larger-scale project would offer a number of benefits including a reduced capital intensity for nickel production; more favourable project economics due to lower unit costs (economies of scale) and increased revenue; and more jobs for Townsville and the wider community.
“When we were originally sizing the TECH project, our aim was to deliver the smallest commercially-sized project which would be economically viable and fundable,” he said.
“Now with LG Chem’s involvement, there is potential to scale up to a size which offers even more attractive capital efficiency.”
Modern refinery
The TECH project is focused on developing a modern battery metals refinery in northern Queensland to process imported, high grade nickel-cobalt laterite ore from New Caledonia to produce nickel sulphate, cobalt sulphate and other valuable co-products.
Mr Grocott said once the plant size was finalised, the company would embark on TECH’s bankable feasibility study and project approvals.