Canadian cobalt supplier Cobalt Blockchain and Luxembourg-based trading company Traxys intend to enter a partnership to produce cobalt hydroxide in the Democratic Republic of Congo (DRC) before the end of this year.
Cobalt Blockchain will take on full responsibility for operating a DRC-based plant built in 2014 by an unnamed Chinese company and acquired recently by Traxys. And the Canadian firm will obtain feedstock from its network of local suppliers in the country over a period of 10 years, using a blockchain-based reporting system that should ensure material is ethically sourced.
Artisanal mining in the DRC has recently come under scrutiny as automotive and battery material companies seek to ensure that no material in their supply chains involves exploitative labour or financing conflict.
Traxys will provide $30mn in financing in return for full hydroxide marketing and sales rights over the 10-year period. The agreement is yet to be finalised but the diversified trading company would join its larger competitors Trafigura and Glencore in becoming a core cobalt hydroxide exporter and marketer.
It is not yet clear if Traxys plans to sell the cobalt hydroxide directly or refine it into further downstream chemicals or metal. Traxys is a core cobalt metal trader globally.
"We hope to start producing by the end of this year and the advantage of this project is that the infrastructure is already in place, which gives us an advantage over other exploration projects that could take five or 10 years to get started," Cobalt Blockchain president and chief operating officer Lance Hooper said.
The plant has a feedstock throughput capacity of 50,000 t/yr to produce up to 3,150 t/yr of cobalt hydroxide. Should the cobalt hydroxide be refined into metal, more than 1,050 t/yr could be produced, assuming a typical 99.8pc cobalt content grading for most commonly traded brands worldwide.
