Cobalt Blue has entered into a non-binding term sheet with STG Metals for the potential sale of standard-grade cobalt metal rounds from the planned Kwinana Cobalt Refinery (KCR) in Western Australia (WA).
The agreement marks progress towards commercialisation of the refinery and provides an early offtake pathway for its cobalt product.
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The term sheet sets out preliminary commercial terms for the sale of cobalt metal rounds containing more than 99.8% cobalt, subject to successful negotiation and execution of a definitive offtake agreement.
While the main terms are non-binding, both companies have agreed to binding conditions requiring them to invest resources and conduct negotiations towards the final agreement.
No commitment to complete the offtake deal is in place until all material terms are finalised and signed by both parties.
Located in the Kwinana Industrial Zone approximately 40km south of Perth, the proposed refinery is expected to have a stage one capacity of around 3,000 tonnes per annum (tpa) of contained cobalt.
This production is set to include approximately 1,000t of cobalt metal and 2,000t of cobalt in cobalt sulphate form.
The facility aims to serve both advanced manufacturing and defence markets with refined cobalt metal, as well as provide cobalt sulphate to the battery industry.
Cobalt Blue has stated that the Kwinana refinery would become the first dedicated mid-stream cobalt refinery in Australia.
Feedstock for the refinery is to be sourced, in part, from a supply agreement with Glencore.
The site selected for construction is the Doral Fused Materials facility, utilising existing infrastructure and its proximity to Fremantle Port.
The company has received approval from the WA Department of Water and Environmental Regulation to proceed with building and operating the facility.
Cobalt Blue’s technology centre in Broken Hill has already produced pilot samples of cobalt metal and sulphate.
The offtake term sheet with STG Metals is described by Cobalt Blue as an important milestone as the project advances toward a final investment decision (FID).
Cobalt Blue CEO Andrew Tong said: “Offtake is a key pillar of our FID process, and this term sheet with STG is a meaningful addition to Cobalt Blue’s commercial framework.
“Combined with our binding feedstock agreement with Glencore and product qualification work at the Broken Hill Technology Centre, we are continuing to build the commercial foundations required to support a final investment decision.”
