Mining and commodities trader giant Glencore (LON:GLEN) is lending Canada’s First Cobalt Corp. (TSX-V:FCC) an initial $5 million to restart the company’s refinery in Ontario, which would become the only North American producer of refined cobalt for the electric vehicle (EV) market.
Glencore said that once a definitive feasibility study for the
expansion is completed, expected to happen in early 2020, it would invest
another $40 million into recommissioning and expanding the refinery,
located 600 km from the US border.
The facility has the potential to produce either a cobalt
sulfate for the lithium-ion battery market or cobalt metal for the North
American industrial and military applications.
Based on a study carried out by Ausenco Engineering Canada, if the First Cobalt refinery operated at 55 tpd, it could produce 5,000 tonnes a year of contained cobalt in sulfate, assuming cobalt hydroxide feed grading 30% cobalt.
The companies are targeting first production late next year,
with the planned expansion completed in 2021.
Prices for the battery metal have soared more than 30% since
Glencore announced this month it would close its Mutanda mine in the Democratic
Republic of Congo, the world’s largest cobalt mine, offering hope for a sector
whose shares have been hit by fears over a global recession.
Oversupply and stockpiling by companies in the battery
supply chain, however, had caused the metal fell to $12 a pound. In April last
year, cobalt was selling for $44 a pound, its highest level in a decade.