Australian Mines has continued to seek offtake partners for the Sconi nickel-cobalt project in Queensland.
The company stated “a significant amount of activity” for offtake negotiations had taken place in the March quarter, which covered pricing, volumes and indicative timelines.
An offtake agreement is still expected to be confirmed in 2021.
The company is confident that an offtake agreement will be secured due to the battery materials the Sconi project will produce.
Australian Mines managing director Benjamin Bell echoed this point, highlighting the significance of the project.
“Our potential offtake partners appear acutely aware that Sconi, when fully developed, will be a lowest cost-quartile producer of electric vehicle battery materials in the world with a project life in excess of 30 years,” he said.
“Additionally, Sconi’s characteristics of having operations in the Tier 1 jurisdiction of Australia; a demonstrated production capability; a track record of creating quality battery materials and a fully auditable and ethical supply chain make the project even more attractive to our potential offtake partners.”
Australian Mines has also used Sconi’s nickel, cobalt and manganese resources to produce P-CAM (precursor cathode active material) for nickel-cobalt-manganese batteries.
The company expects demand for battery minerals will exceed supply in the medium term.
“To address this projected supply and demand imbalance the potential off-take partners for Sconi will need to lock in new sources of battery minerals, which in turn will reinforce the competitive tensions within the industry,” the company stated.
“This expected pinch point in the supply of battery materials has been highlighted in Australian Mines offtake discussions, with at least three potential offtake parties indicating they will require the equivalent volume of five Sconi Projects by 2023/25 to meet their base-case, conservative electric vehicle sales figures.
“These anecdotal observations from our ongoing offtake discussions suggest the electric vehicle sector alone will likely need, at least, the equivalent of 15 Sconi-size nickel-cobalt projects to be in production by 2023/25.”
The Sconi project is valued at $1.5 billion and is expected to create 289 long-term jobs once operational.