Cobalt: First Cobalt secures Glencore loan for refinery restart and expansion

On 26 August, Canada-based First Cobalt announced that the company had secured a US$5M loan from Glencore for the restart and expansion of its flagship asset First Cobalt Refinery, located in the town of Cobalt in Canada. The new funding will be injected into a plan to develop the refinery, with aims to operate at 12tpd by late 2020 (equivalent to 1ktpy of cobalt contained in sulphate) and 55tpd by 2021 (equivalent to 5ktpy of cobalt contained in sulphate). On condition of the completion of a DFS in Q1 2020 confirming the refinery’s potential to operate at 55tpd, Glencore is prepared to finance an additional US$40M for further recommissioning and expansions.

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A partnership with Glencore (the world’s largest cobalt miner) puts First Cobalt and its brownfield project in a healthy position compared to its North American peers. First Cobalt is set to become the only (battery-grade) cobalt sulphate producer in the region, positioning itself as a local supplier for North America’s growing EV industry. This could be the first step towards establishing a North American battery supply chain. The restart of First Cobalt’s refinery may also be good news for greenfield cobalt mining projects (such as those of NICO, Dumont and NorthMet) and potential new precursor/cathode/battery manufacturers, as an operational refinery in the region could create more synergies and economic links between downstream and upstream parts of the industry.

Although a major consumer of refined cobalt, North America has limited captive cobalt production. Mined and refined output from Canada represents nearly all cobalt production in the region with Vale being the only integrated operation where cobalt is produced in metal form as a by-product of nickel mining. With no sizeable domestic capacity for cobalt smelting or refining, the USA imports large amounts of cobalt metal and chemicals (mainly sulphate and oxide) from producing countries such as Canada, Japan and China. As such, the USA’s net import reliance on refined cobalt has long been an Achilles’ heel – a supply chain issue that exposes the country, and consequently the North American region, to substantial supply risks considering the strategic importance of the blue metal.

Roskill’s NEW Cobalt: Outlook to 2029 report was published in August 2019. Click here to download the brochure and sample pages or to access further information.

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