Wedoany.com Report-Nov. 17, Chilean Cobalt, listed as COBA on US-OTC, has entered into a life-of-mine offtake agreement with a Glencore subsidiary, traded as GLEN on the LSE. The arrangement covers the entire output of cobalt and copper from the La Cobaltera and El Cofre projects located in northern Chile.

Intermediate materials will primarily be directed to the hydrometallurgical facility operated by U.S. Strategic Metals in Fredericktown, Missouri. This plant is engineered to yield 3,000 to 5,000 tonnes of cobalt annually, representing about half of the present import volume into the United States.

“Working with Glencore, one of the world’s leading producers and marketers of cobalt and copper, satisfies a key condition precedent as we pursue strategic project financing,” said Duncan Blount, chairman and CEO of Chilean Cobalt.

Following the announcement, the company's shares in New York increased 39% to US$0.45 on Thursday, resulting in a market value of approximately US$20 million.

The La Cobaltera–El Cofre area is situated in Chile's established San Juan cobalt-copper district. Historical operations in the early 1900s extracted high-grade veins containing over 6% cobalt. The mineralization includes structurally guided cobalt-copper veins and layered deposits within metamorphic host rocks near the Atacama Fault Zone and Infiernillo shear features.

Development plans involve staged reactivation of mining activities, aiming for a processing rate of 10,000 tonnes per day. Over a 10- to 15-year period, this is expected to produce 3,000 to 5,000 tonnes of cobalt and 20,000 to 25,000 tonnes of copper each year.

Initial capital requirements are projected between US$300 million and US$400 million, or C$420 million to C$561 million. A letter of interest for US$317 million has been obtained from the U.S. Export-Import Bank, anticipated to fund around 80% of the early-phase expenses. Glencore will offer assistance during construction and for processing activities in the United States.

This partnership establishes Chilean Cobalt as an additional supplier in the Americas amid evolving market conditions. The Democratic Republic of Congo accounts for more than 75% of global mined cobalt and has implemented export management measures since February, which may reduce shipments to half of the previous year's levels, based on available information. Refining capacity remains prominent in certain regions, with data from Benchmark Mineral Intelligence indicating substantial shares in processed cobalt and refined copper.

“Concentration risk across the DRC and China underscores the importance of building a U.S.-linked supply chain,” the company stated. “Our partnership with Glencore and U.S. Strategic Metals marks a decisive step in reshoring strategic minerals production.”

In September, Chilean Cobalt finalized the purchase of El Cofre from a subsidiary of Fuerte Metals, listed as FMT on TSXV, for US$1.89 million, settled through 4.5 million shares. A formal mineral resource estimate compliant with NI 43-101 standards is pending for the properties.

Industry observers note that the Glencore commitment provides essential support for funding and integrates the projects into a developing battery materials network involving extraction in Chile, refinement in the United States, and demand from electric vehicle manufacturers worldwide.

The phased approach allows for controlled scaling, beginning with infrastructure upgrades and equipment installation. Environmental assessments and community engagements form part of the preparation to ensure responsible operations.

Cobalt's role in battery cathodes drives demand growth, particularly for energy storage and mobility applications. Secure offtake terms facilitate lender confidence and project advancement.

U.S. Strategic Metals' Missouri site incorporates advanced separation technologies to yield high-purity products suitable for domestic manufacturers. This localization reduces transportation distances and enhances supply reliability.

Glencore's involvement brings marketing expertise and logistical capabilities, ensuring efficient material flow from mine to end-user. The life-of-mine duration aligns output with long-term market needs.

Capital from EXIM supports equipment procurement and facility construction, with repayments structured over operational cash flows. Additional equity or debt may complement the financing package.

As development progresses, drilling programs will refine resource models and optimize mine plans. Permitting timelines target initiation of production within the planned framework.

This collaboration exemplifies integrated supply chain development, connecting resource-rich areas with processing centers to meet strategic requirements. It positions Chilean Cobalt to contribute meaningfully to diversified sourcing options for critical materials.