Cobalt Blue costs cobalt refinery at $60 million

Mineral processing company Cobalt Blue Holdings has released updated project cost estimates and revenue analysis for its proposed Kwinana, Western Australia Cobalt Refinery (KCR) to support financing processes and transition to construction.

The company plans KCR Stage One capacity at 3,000 tonnes per annum cobalt as cobalt sulphate and ~ 500 tpa nickel metal.

Construction is expected to commence in 1H25, with completion expected within 12 months.

Cobalt is used in almost every lithium-ion rechargeable device from smartphones to smartwatches, tablets to laptops, electric vehicles to solar and battery systems in homes.

Cobalt Blue estimated a capital cost of $60 million, giving a Stage One Post Tax NPV of $68 million and returning IRR of 23 percent.

A Stage Two project to double capacity could be achieved for a capital cost of $23 million, giving a Post Tax NPV of $90 million and IRR of 64 percent.

The CEO of Cobalt Blue Holdings Joe Kaderavek said: “This latest study further demonstrates the Kwinana Refinery is a compelling, low-cost investment that rapidly injects Cobalt Blue into the mid-stream segment of the Strategically Aligned Nations’ critical minerals supply chain.

“The longer-term returns from expansion stages are particularly attractive.”

The combined Stage One + Stage Two Refinery was estimated to have a Post Tax NPV of $158 million generating EBITDA $46 million per annum.

Cobalt Blue said the update presented a compelling evaluation of a defensive cobalt and nickel refining business that is expected to generate stable margins throughout the highs and lows of the cobalt price cycle.

The refinery in Kwinana aims to process critical battery metals from 3rd party feedstock and Mixed Hydroxide Precipitate (MHP) from the company’s Broken Hill Cobalt Project.

Kwinana is a major chemicals district and typically, and up to 60-70 percent of the costs associated with conversion from Mixed Hydroxide Precipitate (MHP) to cobalt sulphate come from reagent and chemical costs.

Iwatani Australia Pty Ltd, a subsidiary of Iwatani Corporation, is Cobalt Blue’s refinery partner in delivering and operating the Kwinana Cobalt Refinery.

Further reading:
Now is the time to invest in critical minerals refining – By Joe Kaderavek CEO of Cobalt Blue

Image: Cobalt Blue