Early-May saw the release of First Cobalt’s (FCC) feasibility study (FS) regarding the redevelopment and expansion of its cobalt refinery complex in Ontario, Canada. This study set out the construction of a facility with the capacity to produce 25ktpy of cobalt sulphate (5ktpy contained cobalt) from third-party hydroxide feedstock.
Cobalt sulphate production is dominated by China, which currently accounts for around 80% of global capacity. As with all components of the battery raw material supply chain, any geographic broadening of supply is strongly welcomed by many non-Chinese industry consumers; so, what is the prognosis for the development of the Ontario facility?
Comparing some of the FS findings with analysis from Roskill’s Cobalt Chemicals Cost Model Service, which gives granular analysis into the cost of producing cobalt chemicals and fine powder, we see some interesting points.
The FS outlines a planned cobalt recovery of 93%. However, our analysis suggests existing plants (predominantly in China) with comparable flowsheets, often achieve recoveries of around 95%. This suggests there is potential for improvement on this 93% figure, as indicated by FCC’s comments.
The processing costs of US$2.72/lb cobalt contained (excluding feedstock costs) is broadly comparable to costs currently being achieved in China. However, within the granularity outlined by FCC, there is some notable divergence:
The capital cost of FCC’s plant expansion is US$56M, which equates to around US$5/lb of annual production capacity. Based on our estimates, this capital intensity is considerably higher than for cobalt sulphate plants currently being developed in China. Across the metals space, the capital intensity cost of new processing facilities in China are some of the lowest globally, owing to the availability of cheap labour and low-cost items of plant and equipment.
Finally, the overall profitability of a cobalt sulphate plant is often dictated by the cost of obtaining feedstock material. As such, much will depend on the deal FCC manages to strike with Glencore (or potentially, other parties) in terms of financing, feedstock supply and subsequent offtake.
Roskill’s Cobalt Chemicals Cost Model Service is designed to provide miners, financial institutions, governments and other industry stakeholders with an in-depth understanding of the the costs involved throughout the cobalt supply chain. For more information, click here.