Australia's Cobalt Blue Signs Term Sheet for 1,000-Tonne Annual Cobalt Offtake

en.Wedoany.com Reported - On October 19, Australian mining company Cobalt Blue Holdings announced that it has signed a non-binding cobalt product offtake term sheet with Swiss metals trader STG Metals, under which it plans to supply standard-grade cobalt metal with a purity exceeding 99.8% from its Kwinana cobalt refinery in Western Australia. The proposed cooperation term is three years from commercial operation, with 500 to 750 tonnes supplied in the first year and 800 to 1,000 tonnes in each of the second and third years; the parties may also negotiate a three-year extension.

The proposed product selling price will reference the Fastmarkets-published Rotterdam standard-grade cobalt spot benchmark price and be denominated in US dollars. Both parties have agreed to commit the necessary personnel and resources to advance negotiations toward a formal offtake agreement, but commercial terms such as product sales volume, price and term shall be subject to the final agreement. Subsequent transaction conditions include completion of construction and commissioning of the Kwinana refinery, the product meeting quality certification requirements, and approval of the formal offtake agreement by the Cobalt Blue board of directors. The parties have agreed on December 31, 2028 as the deadline for fulfillment of the relevant conditions, at which point extension or termination may be negotiated.

The Kwinana cobalt refinery is planned to produce approximately 3,000 tonnes per year of cobalt-containing products in its first phase, including 1,000 tonnes of cobalt metal and 2,000 tonnes of cobalt contained in cobalt sulfate products. The project is planned to be built on the site of existing industrial facilities of Iwatani Australia approximately 40 kilometers south of Perth, and has obtained construction and operating engineering approvals from the Western Australia water and environmental regulator. Part of the refinery's feedstock will be procured under a supply agreement signed between Cobalt Blue and Glencore.

Cobalt Blue's technology center in Broken Hill has already produced cobalt metal and cobalt sulfate through pilot production and completed relevant product quality verification. The Kwinana project is currently advancing product offtake, feedstock supply and engineering preparations required for a final investment decision. The proposed offtake arrangement with STG Metals mainly involves cobalt metal products, while product certification work for cobalt sulfate targeting the battery market continues.