Ardea Resources has signed a memorandum of understanding (MoU) with a Japanese consortium to develop the $2bn Kalgoorlie Nickel Project (KNP)-Goongarrie Hub in Western Australia.

The consortium comprises Mitsubishi Corporation, Sumitomo Metal Mining and Mitsui & Co.

The non-binding MoU provides a framework to negotiate a binding agreement between the consortium and Ardea to complete the definitive feasibility study for the KNP-Goongarrie Hub.

The agreement also has provisions for the two parties to make a final investment decision and jointly secure funding for the project development.

Ardea Resources managing director and CEO Andrew Penkethman said: “The Ardea team will be working with well-regarded and experienced partners who recognise the global significance of the Kalgoorlie Nickel Project to the renewable energy supply chain and see the development advantages derived from our location within the best resources operating jurisdiction in the world.

“Japan has been integral to the development of Australia’s iron ore, natural gas and coal sectors for the benefit of both nations.

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“We look forward to Ardea and the KNP Goongarrie Hub joining the successful Australia and Japan project development model and welcome the contribution of the consortium in developing Ardea’s battery and critical minerals projects.”

Ardea said the consortium will earn a significant interest in a joint venture (JV), which will develop and operate the KNP-Goongarrie Hub.  

The proposed JV terms are due to be negotiated between Ardea and the consortium.

According to the pre-feasibility study, the project is estimated to have a capital cost of A$3.1bn ($2.06bn) and has the potential to produce 30,000 tonnes per annum (tpa) of nickel and 2,000tpa of cobalt during its operational life of more than 40 years.

The MoU has provisions for the two parties to make a final investment decision for the KNP-Goongarrie Hub.