The plant would be supplied with cobalt hydroxide produced at ERG's Metalkol Roan Tailings & Reclamation (RTR) project in the Democratic Republic of Congo (DRC).
The intention is to produce nickel-cobalt-manganese (NCM) precursor materials that are used in electric vehicles (EV). ERG is looking at technical solutions from China’s BGRIMM Technology Group and Finland’s Outotec, giving scope to produce precursors for NCM 622 or NCM 811 battery cathodes - dependent on market conditions.
After a two year construction period, the ERG plant would produce 90,000 tonnes per year of NCM precursors in year one, followed by an expansion, dependent on market conditions.
“The vertical integration of ERG’s cobalt business aims to strengthen its position as a strategic supplier of traceable battery materials for the electric vehicle industry,” ERG said today.
Cobalt hydroxide production at RTR started in late 2018, and in its first phase, produces about 14,000 tpy cobalt in hydroxide. Phase 2 would take output to about 20,000 tpy.
Cobalt hydroxide payables - the percentage of the metal price paid to secure intermediates - have strengthened this year as a result of tightening supply and on market expectations that bullish forecasts for EV penetration should start to come to fruition.
Fastmarkets’ cobalt hydroxide payable indicator
stands at 66.5-68.5% of the standard grade cobalt metal price, low-end, up from 61.5-62% at the beginning of the year.
Benchmark daily prices for cobalt, standard grade, in-warehouse Rotterdam
were assessed at $16.90-17.35 per lb on February 18, up from $15.10-15.95 per lb at the beginning of January.
The location of ERG’s proposed plant has not yet been determined, while nickel sulfate for the plant would be sourced from third parties, or produced by ERG from nickel raw materials.
“We are leading industry efforts to ensure the sustainable, traceable cobalt sourcing in supply chains across Europe, North America, South Korea and Japan,” ERG chief executive officer Benedikt Sobotka said in a statement.