Canada-based mining exploration firm First Cobalt and Glencore have signed a memorandum of understanding (MoU) to finance First Cobalt’s refinery in Ontario, Canada.

The deal will also see cobalt feedstock provided to the project.

Following the execution of definitive agreements, the two firms will collaborate on final flowsheet design in order to speed up accelerating the recommencement of the cobalt refinery.

Glencore will review whether to provide a loan to fund the capital requirements to recommission the refinery. It will enter into a tolling agreement with First Cobalt.

The refinery could become operational in between 18 and 24 months. Discussions are currently underway with provincial government officials to speed up the permit amendment process.

First Cobalt president and CEO Trent Mell said: “The partnership announced today will help First Cobalt achieve its stated objective of providing ethically-sourced battery grade cobalt for the North American electric vehicle market.

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“As the world’s leading producer of cobalt, Glencore is an ideal partner for First Cobalt. Our shareholders will benefit from Glencore financial backing, technical support and opportunities for regional synergies with their Sudbury and Rouyn-Noranda operations.”

He also added: “This announcement marks the culmination of one year’s work, bringing First Cobalt closer to generating cash flow and reducing reliance on the equity markets to fund future advancement of our North American primary cobalt assets in Idaho and Ontario.”

“As the world’s leading producer of cobalt, Glencore is an ideal partner for First Cobalt.”

The First Cobalt Refinery is currently the only permitted primary cobalt refinery in North America.

Recently, the firm completed testing of third party cobalt hydroxide as a potential source of feed. This test confirmed that the existing processes in the First Cobalt Refinery can produce a high purity, battery grade cobalt sulphate.