Cobalt developer Australian Mines has signed an offtake agreement with South Korean electric vehicle (EV) battery manufacturer SK Innovation — parent SK Group is currently 95th on the Fortune Global 500 — for 100 per cent of production from the Sconi cobalt-nickel-scandium project in Queensland.
The Sconi project, roughly 250km from Townsville, is considered to be one of Australia’s most advanced tech metal projects, and initial agreements between Australian Mines and SK in November last year saw the former’s share price jump 500 per cent from 1.6 cents per share to 11 cents per share (today’s price is 10 cents).
The cobalt and nickel produced at the Sconi project is intended for use at SK Innovation’s Hungarian manufacturing plant servicing German car companies.
The initial offtake agreement covers a seven-year period with the option of extending by a further six years, with agreed volumes of 60,000 tonnes per year (t/y) of nickel sulphate and 12,000t/y of cobalt sulphate. There is also an option agreement to acquire 19.9 per cent of Australian Mines’ ordinary shares.
Benjamin Bell, managing director of Australian Mines called the signing a “landmark occasion” and that he was looking forward to working with SK Innovation.
“Australian Mines is delighted to be partnering with a leading electric vehicle battery manufacturer in SK Innovation to develop the Sconi project — a company that has a solid track record in developing and operating multi-billion dollar resource projects around the world,” he said.
Cobalt is becoming an increasingly lucrative endeavour and other companies are taking charge. According to Bloomberg, Apple Inc., which is one of the largest users of battery-grade cobalt in the world, is currently in talks to source its cobalt directly rather than through third-parties in an effort to secure sufficient supplies and save money.