Atomic No. 27

First Cobalt’s feasibility study yields promising results for future of EVs

In major news for the future of electric vehicles, a major North American manufacturer announced plans to expand its main production facility along with promising results of a feasibility study for the use of cobalt sulphate to power EVs. First Cobalt Corp., of Toronto, has plans to produce 1,000 tonnes of cobalt or 5,000 tonnes of cobalt sulphate by late 2020 in its Ontario cobalt refinery, it announced May 4.

The positive results come from an independent feasibility study conducted on its permitted cobalt refinery in Ontario, Canada. The study also contemplates expanding the existing facility and adapting it to be North America’s first producer of cobalt sulfate, an essential component in the manufacturing of batteries for electric vehicles. The availability of cobalt in general has been a chief concern of EV critics:

“The feasibility study demonstrates that the First Cobalt Refinery project can become a viable, globally competitive player in the North American and European electric vehicle (EV) supply chain,” said a First Cobalt press release. “The study reinforces the strength of First Cobalt’s business strategy for a rapidly evolving EV market that is heavily dependent on supply from China.”

Highlights of the study include:

  • Annual production of 25,000 tonnes of battery grade cobalt sulfate from third party feed, representing 5% of the total global refined cobalt market and 100% of North American cobalt sulfate supply
  • Initial capital estimate of $56 million and an operating cost estimate of $2.72/lb of cobalt produced, which is competitive with global markets
  • $37 million in undiscounted pre-tax free cashflow to the Project forecasted during the first full year of production
  • $139 million after-tax net present value (NPV) using an 8% discount and 53% after-tax internal rate of return (IRR), representing a payback period of only 1.8 years
  • Discussions underway with Glencore on commercial arrangements, financing and allocation of project economics; third party and government funding opportunities also under review
  • Several EV manufacturers have expressed an interest in purchasing a North American cobalt sulfate
  • Several opportunities will be evaluated over the coming months that could enhance project economics further, including alternative approaches to managing elevated sodium concentrations prior to returning process water to the environment
  • Prefeasibility-level study also completed on an early ramp-up scenario using existing permits and equipment to conduct trial runs processing a different type of feedstock

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