First Cobalt Corp has started testing cobalt hydroxide material as feedstock for its refinery in Ontario, Canada, with the goal of producing cobalt sulfate or metallic cobalt products for sale into the North American market.
The company has retained inspection and certification firm SGS Canada to test the suitability of different cobalt feed material using the refinery's current flowsheet and is also conducting sampling and ore sorting programs at its Canadian Cobalt Camp, a network of 50 past-producing mines.
It has determined there is potential for incremental feed from the site, the company said.
According to Trent Mell, company president and chief executive officer, the objective is to enter into a long-term agreement for a reliable source of ethically-mined cobalt, with discussions under way with cobalt miners and commodity traders to explore options.
"The cash flow potential from restarting the refinery in as little as 18 months could allow us to fund a significant amount of work to advance our flagship Iron Creek cobalt project in Idaho, US, while also providing a much-needed North American source of cobalt," Mell said.
"In parallel with these tests, management has commenced discussions with third party sources of capital that would minimize or eliminate any equity dilution associated with a restart of the First Cobalt refinery," he added.
A final decision on whether to put the refinery, which has been on care and maintenance for three years, back into production has not yet been made. Over the past year, four cobalt companies have come together under the First Cobalt banner to create a vertically integrated cobalt company with assets in Idaho in the US and Ontario, Canada.
The refinery is a hydrometallurgical cobalt-silver-nickel refinery in the Canadian Cobalt Camp, roughly 500km from the US border. The facility was commissioned in 1996 and has a daily nominal throughput of 12-24 tonnes.
At a 24 tonne per day feed rate and using the current flowsheet, the company estimates the capital cost of the restart at $25.7 million, including a 30% contingency.
The company is exploring various sources of feed for the refinery, which could include cobalt concentrate from mining operations, cobalt hydroxide and recycled battery materials from North America.
With some flowsheet modifications, the refinery could produce a cobalt sulfate for the lithium-ion battery market or cobalt metal for the North American aerospace industry or other industrial applications, First Cobalt noted.
The refinery historically produced cobalt carbonate, nickel carbonate and silver precipitate which can be smelted to produce dor. In order to produce cobalt sulfate, the flowsheet would be modified to include a cobalt crystallization circuit.
Fastmarkets MB assessed the discount for cobalt sulfate, ex-works China, to the benchmark low of the low-grade metal price
, at $2.01-2.17 per lb on November 2.
Discounts have been intact since the second half of April this year, putting pressure on the production margins
of those producers still exposed to high hydroxide payables agreed late last year.