First Cobalt is launching a $2.1-million work program for revive its cobalt refinery in northeastern Ontario.
Following on the heels of a positive feasibility study of the plant located near the town of Cobalt, the Toronto company is working on boosting the facility's production of cobalt sulphate to 25,000 tonnes annually.
Early stage production could start later this year or in early 2021, beginning as a demonstration plant to produce samples of cobalt sulphate for electric vehicle manufacturers.
The company has ambitious plans to quadruple production capacity to position the refinery as North America's only permitted producer of cobalt sulphate.
Formerly known as the Yukon refinery, the facility was built in 1996 and placed into mothballs by the previous owners in 2015.
First Cobalt acquired the plant three years ago and intends to utilize it as a toll processing operation for international mining companies. Base metal miner Glencore provided funds to do the feasibility study.
The two companies are working on an agreement to supply cobalt material, mined in the Democratic Republic of Congo, and ship it to northeastern Ontario for processing over a four-and-a-half year period.
Subject to the certain conditions, Glencore will provide all the capital needed to recommission and expand the plant. First Cobalt said it's also in discussions with electric vehicle manufacturers.
To better improve the plant's economics, First Cobalt is tweaking the processing plans to increase cobalt recoveries, as well as find ways to lower the initial capital cost of US$56 million and later operating costs.
The company expects substantial completion of most of this work within three months.
"The (feasibility) study also identified several opportunities that could further enhance project economics and today's work program announcement intends to address several high impact opportunities over the next 90 days,"said Peter Campbell, the company's vice-president of business development in a May 13 news release.
"I am confident that our project team will be able to build upon the strong results we already achieved."
"This work will enable us to meet our commitments to shareholders and stakeholders to move the project forward in 2020," said First Cobalt president-CEO Trent Mell in a statement.
"According to Benchmark Mineral Intelligence, there are currently no plans to commission new cobalt refineries outside of China other than First Cobalt.
"China accounts for approximately 79 per cent of the world's refined cobalt sulfate production and we are seeing that many automotive companies outside of China are interested in sourcing cobalt sulfate closer to their manufacturing facilities."
Mell previously said the plant could restart within six months, producing 12 tonnes of cobalt sulphate a day.
A proposed big expansion would increase that to 55 tonnes a day, but that likely won't happen until the end of 2021.
