Australian metals firm Cobalt Blue is unlikely to further progress its Broken Hill cobalt project in New South Wales until mineral prices rise, the firm told Argus this week.
Cobalt Blue in early 2024 paused work on Broken Hill's final feasibility study because of financing challenges, and launched a strategic review of the project looking at the viability of "a condensed, higher-margin project."
That review is still ongoing, but it is unlikely to advance the project until cobalt market conditions improve, the company's ReMine Plus manager Helen Degeling told Argus on the sidelines of the Critical Minerals and Energy Investment Conference, which was held in Brisbane over 24-25 February.
Cobalt Blue has been mining and processing ore at a demonstration plant at Broken Hill since 2022. But traditional lenders are unlikely to fund the project's next phase — a ramp up to commercial production — at current cobalt prices, Degeling said.
Cobalt Blue was using a cobalt price assumption of approximately $27/kg while working on its Broken Hill definitive feasibility study. Argus' cobalt powder min 99.8pc ex-works China price was last assessed at $22.30/kg on 20 February, down from a high of $102.40/kg on 30 March 2022.
Cobalt Blue's analysts expect cobalt prices to stabilise over the coming years, as demand rises and global supply growth slows. But until that happens, the company will focus on developing its Kwinana cobalt sulphate refinery in Western Australia, and the Mount Isa sulphuric acid project in Queensland.
Cobalt Blue's Kwinana refinery will start producing 3,000 t/yr of cobalt sulphate and 500 t/yr of nickel metal from the second half of 2027, using third-party mixed hydroxide precipitate (MHP). The company plans to start building the plant in late 2025.
Cobalt Blue's Mount Isa sulphuric acid project is at an earlier development stage than the WA refinery. The company's engineering teams have developed novel techniques to extract sulphuric acid from mineral tailings, and are currently testing potential feedstocks for the plant. Mount Isa's final capacity will depend on feedstock procurement and regional demand trends, the company said.
Cobalt Blue is not the only critical mineral firm pivoting towards processing projects. Some ACMEIC attendees indicated that financing challenges are also driving vanadium developers to consider prioritising refining work.
