First Cobalt announced positive feasibility study results for its cobalt refinery project in Ontario, Canada, which called for a $56 million investment. The study estimated operating costs for the refinery at $2.72/lb. It also estimated a pre-tax cash flow of $37 million during the first year of operation. Cobalt is currently selling for $13.41/lb.
In July 2019, First Cobalt entered into a partnership with Glencore to fully fund a phased recommissioning of First Cobalt’s refinery. This agreement was contingent on the positive outcome of a feasibility study. Glencore plans to use First Cobalt’s refinery to treat cobalt feed material supplied from their Democratic Republic of the Congo operations on a 4.5-year rolling basis. The objective of this project is to produce approximately 25,000 metric tons (mt) of cobalt sulphate to support the electric vehicle (EV) market.
Currently there are no publicly announced plans to commission a new cobalt refinery outside of China, other than First Cobalt, according to the company. At the same time, auto manufacturers in North America have a strong desire to source cobalt sulphate in North America. The report also estimates that cobalt demand from nickel-cobalt-manganese (NCM) batteries used in EVs will increase from approximately 20,000 mt in 2019, to more than 730,000 mt in 2040.