Australian Mines has extended its timeline for the Sconi project offtake agreement with Korean electric vehicle battery manufacturer SK Innovation due to project financing concerns.
Australian Mining understands the battery materials developer demands an agreed pre-payment from SK Innovation with respect to future offtake.
The two companies would now discuss the amount and terms of such financial support.
They signed an offtake agreement for 100 per cent of production from the Sconi cobalt-nickel-scandium project in Queensland in February last year.
Australian Mines demands SK Innovation to submit an agreed pre-payment letter by October 31. The company will terminate their offtake agreement if this isn’t met, a media statement read.
Should SK Innovation’s prepayment come through timely, Australian Mines will negotiate and finalise formal documentation for this financial support by January next year.
The companies would also agree to a further period of three months to secure the remaining financing for the Sconi project.
Australian Mines subsidiary Sconi Mining Operations had originally planned to obtain legally binding documents for financing to complete the construction and commissioning of the project on Monday September 30.
SK Innovation may, however, need to conduct additional due diligence on Sconi and its project financing, according to Australian Mines in a media statement.
The cobalt developer has also continued its discussions with potential project financiers, which have reportedly progressed following signing of its offtake agreement with SK Innovation.
Australian Mines has announced its Sconi project could generate $5 billion free cashflow over the 30-year mine life.
The total nickel and cobalt production from Sconi will be sufficient to produce the equivalent of at least three to six million electric vehicle battery packs, according to Australian Mines.