Battery metals mine’s new deal

A BATTERY metals mine north of Townsville has been given a boost after the company signed an agreement with a major Korean company.

Greenvale battery metals hopeful Australian Mines has announced a new agreement on the supply of nickel and cobalt sulphates to Korean energy giant SK Innovation.

Australian Mines told the Australian Stock Exchange it had executed a long-form agreement that expanded on the agreed terms signed with SK Innovation last year.

It said SK Innovation, subject to conditions, had agreed to buy all of the battery-grade cobalt sulphate and nickel sulphate produced from its Sconi project. The period for the agreement was for an initial seven years, which could be extended for a further six years.

Under the new agreement, conditions include that subsidiary Sconi Mining Operations obtain finance agreement to develop the project by September 30 and for SK Innovation to complete due diligence of the Sconi project before that date.

Australian Mines plans a $1.3 billion mine and plant to produce battery metals at Greenvale. The company is proposing at least three opencut pits and a two million tonne per annum processing plant at Greenvale, producing nickel and cobalt sulphate.

Australian Mines has almost doubled the expected life of its Sconi project to 30 years on the back of a substantial upgrade in its resource estimates.

In June the company announced its total mineral resources had been increased to 75.71 million tonnes, grading 0.6 per cent nickel and 0.08 per cent cobalt. The resources would produce 1.4 million tonnes of nickel sulphate and 209,000 tonnes of cobalt sulphate, enough to produce three to six million electric vehicle battery packs.

The planned life of the mine was increased from 18 years to more than 30, providing total revenues of $13.27 billion and a net cash flow of $5 billion.

But the company is relying on high nickel and cobalt prices in modelling, which has been questioned after the price of cobalt more than halved in the past year. If the mine proceeds, the project will need a construction workforce of 500 and full-time workforce during operation of more than 300.