Pure Minerals Limited, West Perth, Australia, said on Thursday it signed a non-binding offtake agreement with South Korean battery supplier LG Chem for the supply of nickel and cobalt, Smallcaps.com.au reports.
LG Chem, which counts Tesla and Hyundai Motor as customers, will look to buy 10,000 tonnes of nickel and 1,000 tonnes of cobalt from the company’s Townsville Energy Chemicals Hub (TECH) in Queensland state.
The offtake agreement will initially run for three to five years and LG Chem may help to finance Pure Mineral’s TECH project to raise capacity to meet its needs, the company said.
“With LG Chem’s involvement, there is now potential to scale up the size of the TECH Project to one which offers even more attractive capital efficiency,” Chief Executive Officer Stephen Grocott said in a statement.
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
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 finalized, the company would embark on TECH’s bankable feasibility study and project approvals.