Queensland Pacific Metals has signed a seven-year offtake agreement with LG Energy Solutions and POSCO for nickel and cobalt from the Townsville Energy Chemicals Hub (TECH) project.
10,000 tonnes of nickel per year and 1000 tonnes of cobalt per year will be sold in deals worth a total of $US15 million ($19.35 million) to QPM.
LGES and POSCO will pay $US10.5 million and $4.5 million respectively, also giving them 7.5 and 3.2 per cent shares in QPM.
QPM managing director Stephen Grocott said the deals authenticated the TECH project.
“The ability for QPM to attract and establish business relationships with companies of the calibre of LG Energy Solutions and POSCO is validation for our company and what we are trying to achieve with the TECH project,” Grocott said.
LGES global supply chain management leader Dongsoo Kim said the offtake should placate the demands of LGES customers.
“This is the most meaningful investment in our supply chain for LG Energy Solutions since the company spun out from LG Chem. We believe the TECH project will deliver sustainable nickel and cobalt production that is in line with LGES’ operating philosophy,” Kim said.
The TECH project has been designed to become a sustainable producer of critical chemicals for lithium-ion batteries and electric vehicles.
By processing high-grade ore from New Caledonia, the project will product nickel sulfate, cobalt sulfate, high-purity alumina and other by-products to leave almost zero waste products.
Such investments have been tipped to be increasingly important as such markets take off in the near future.
The Australian Government’s Outlook for Selected Critical Minerals Australia 2021 report was released this week by the Office of the Chief Economist in the Department of Industry, Science, Energy and Resources.
The report detailed the prospect for market growth in metals such as lithium, cobalt, graphite, vanadium and rare earth elements.
Highly considered by the report was the market conditions surrounding electric vehicles and associated battery storage technology.
The global fleet size of electric vehicles is expected to grow by 30 per cent by 2050, leaving the battery storage market to lag behind.
This has occurred due to heightened investment by auto manufacturers, according to the report.
“Auto manufacturers have invested heavily in the transition from internal combustion engines (ICE) to electric vehicles (EV), and therefore it is in their interests to recoup their investment as quickly as possible,” the report stated.