Planned refinery big part of ‘new economy’
Materials essential for e-car batteries would be processed near Saskatoon
A planned $250-million refinery near Saskatoon could make Saskatchewan a major producer of materials essential to manufacturing batteries for the clean electric cars of the future.
Fortune Minerals Ltd. of London, Ont., wants to mine its NICO deposit in the Northwest Territories. After milling the ore on site, it then would ship 180 tonnes per day of concentrate by rail to a site near Saskatoon in the Rural Municipality of Corman Park.
There, it will be processed into marketable products, including cobalt compounds, gold, bismuth and copper.
“It’s very important that our products are universally recognized as products for the new economy and a significant enabler for renewable energy,” says Robin Goad, president of Fortune Minerals.
Bismuth is considered a safe alternative to lead in a range of products. Cobalt in the form of lithium cobalt oxide is a key ingredient of rechargeable batteries, including those used in everything from hand-held consumer devices to electric cars.
According to a recent global outlook produced by the International Energy Agency, there were fewer than 1.3 million electric cars on the roads of the 40 largest consuming countries at the end of 2015.
However, sales are expected to ramp up rapidly.
The Paris climate declaration sets targets that would require 100 million new electric cars by 2030, while the IEA suggests as many as 140 million may actually be produced.
Such a rapid adoption of electric vehicles would boost demand for large battery-producing plants — and a supply of cobalt at Fortune’s proposed refinery could encourage construction of a battery plant nearby, according to Goad.
“So here’s an opportunity for some downstream manufacturing and value-added processing in the province,” he says.
The refinery itself would need 85 full-time employees and create contracting opportunities for its construction and upkeep.
Fortune is still awaiting some government approvals.
It has retained a financial firm to raise capital and is updating a feasibility study, which Goad says would be released soon.
The project’s financial prospects have improved, thanks to a steep rise in the world market price for cobalt, currently up to US$25 a pound from $10 a year ago.
Meanwhile, the price of gold is holding steady while bismuth has slid somewhat — an acknowledged issue.
Fortune has retained PricewaterhouseCoopers “to secure the project financing, so we want to make sure we get the right amount of money, which is roughly $600 million,” Goad says.
Several cost advantages support locating the refinery near Saskatoon.
The first is local access to a skilled labour pool that would otherwise have to be flown into the Northwest Territories and housed at a camp — and therefore would be hard to retain.
Electricity for the refinery is available in Saskatchewan at a fraction of the cost in the Northwest Territories. Industrial chemicals are more available, as are services including natural gas. And having a site near a major railway and the Yellowhead Highway is helpful.
As well, Goad cited a tax incentive for anyone who processes ores in Saskatchewan from an extraterritorial location and meets certain conditions. It lasts for five years and applies to a facility costing a minimum $150 million, with more than 75 employees, he says.
An official at Saskatchewan’s Ministry of the Economy, when asked about tax incentives for Fortune, referred to published policies. Another outstanding item for Fortune is the final go-ahead from local government for the proposed refinery site.
“We need a zoning change from the municipality of Corman Park. And then a construction permit, for example, from the Saskatchewan government,” Goad says.
Provincial environmental approvals for the plant and related disposal methods are in hand, he says. Fortune also has the permits required in the N.W.T.
Fortune obtained land there in 1994, began drilling in 1996 and now has proven and probable reserves of 33 million tonnes, sufficient for a 21-year mine life, with prospects for operating longer.
NICO’s reserves contain 82.3 million pounds of cobalt, 1.11 million ounces of gold, 102 million pounds of bismuth, and 27.2 million pounds of copper to support a mill rate of 4,650 tonnes of ore per day.
During the life of the NICO mine, the refinery is expected to annually produce an average of 1,615 tonnes of cobalt contained in a cobalt sulphate heptahydrate, 41,300 ounces of gold, 1,750 tonnes of bismuth in ingots, needles and oxide, and copper as a minor by-product.
The refinery also would be able to process concentrates from other mines (some of which are already identified) and diversify into battery and metals recycling.
Nearly $120 million has been invested by Fortune, of which about $9 million was spent directly in Saskatchewan.
“And if you include the metallurgical test work, which is primarily with a Saskatchewan facility, there’s probably another $10 million,” Goad says.
To extract the end products, Fortune’s refinery would use “hydrometallurgical process methods” that are distinct from heat-intense pyrometallurgical processing, which uses large furnaces to recover metal.
“We’re using proven technology and have done further validation of that process in pilot plant work, including the recoveries of the products we’re going to produce. So we’ve actually produced product for testing by downstream battery manufacturers,” he says.
One result of this process is “a salty effluent that is actually cleaner than the deep saline aquifer which we’re going to inject it into.”
At the project’s end, the land will be reclaimed for agricultural use.
A “filter cake material” will be left behind at the site in a storage facility. Goad says it has been determined to be safe by local experts and validated by Saskatchewan’s environment ministry as part of the completed environmental assessment process.