Kalgoorlie-Norseman Cobalt Region

The cobalt price performance over the last 100 years has been volatile. Historical price spikes have been driven by increasing demand, speculation of further demand and by strategic stockpiling of physical cobalt in anticipation of future demand.

Each time, a supply response from mines in the Democratic Republic of Congo (DRC) has met the required demand. With the electric vehicle revolution now upon us and surging demand for batteries forecast, many forecasters anticipate that buyers may be in for a future punctuated by sporadic supply constraints as demand for battery metals continues unabated.

The graph shows the current spot price for Cobalt. This is still only marginally higher than the 100 year median price which in 2019 was approximately USD$48,000/t. – the vast majority of demand during that timeframe originated from around 35 other industrial uses for cobalt, excluding EV’s. It is economically reasonable to suggest the demand curve for cobalt will continue to shift outwards as demand from the EV revolution continues to materialise.

Cobalt Demand

Many countries include cobalt on their list of critical minerals. Its unique combination of properties make it ideally suited to high temperature, high-wear application including superalloys for jet engines; magnets; carbides; and diamond tools. Most significantly, cobalt is also used in batteries, catalysts and pigments.

Physical Properties

Cobalt’s Critical Roles

The physical properties of cobalt, being thermal stability and energy density, are what make cobalt an essential ingredient in the cathode of lithium-ion batteries. The drive for improved battery performance has seen Nickel-Manganese-Cobalt cathode chemistry rise to be the dominant chemistry. NMC532 (5 parts nickel, 3 parts manganese, 2 parts cobalt) remains the dominant cathode chemistry with NMC 622 use expanding (both at 20% cobalt content). However, given the high value of cobalt, increasing demand and limited supply, there has been a push to develop NMC 811 technologies to move towards higher proportions of cheaper nickel and less expensive cobalt (10% cobalt content). 

​Recent incidents of battery combustion have highlighted the critical role cobalt plays in battery chemistry stability. A minimum amount is essential. Below that minimum, cobalt cannot be substituted, regardless of the cost.

Cobalt Mining

A Deeper Understanding

99% of all cobalt is mined as a by-product of nickel and copper mining. For new cobalt to enter the market, these mines require an increase in nickel and copper prices. In Australia, most nickel laterite projects require high pressure acid leaching (HPAL) to liberate the nickel and cobalt metals from the minerals. Typically, HPAL requires a capital investment of over AUD 1 billion.

Generally around 70%  of global cobalt supply is mined as a byproduct from copper mines in the Democratic Republic of Congo (DRC) in central Africa. Of this about 20% is sourced from 110,000-150,000 artisanal miners often in unsafe conditions. Many fatalities occur in these mines and tens of thousands of children are often exploited in substandard working conditions. Ethically sensitive investors in major mining companies are becoming increasing strident in wanting their companies to seek cobalt supplies from sustainable sources but also adhering to minimum working standards and conditions. Mining countries such as Australia and Canada obviously meet these minimum standards and should receive more attention as future supply hubs.

Cobalt Output

Kalgoorlie-Norseman Cobalt Region

As well, a significant quantity of all the DRC cobalt output has already been pledged to China via various offtake agreements.

The Kalgoorlie-Norseman Cobalt Region offers a compelling alternative, being an advanced, low capital cost and high-quality cobalt project located in the stable mining jurisdiction of Western Australia. 

Australian companies show respect for the law of contract and there are legislated requirements for the construction, operation and maintenance of mining sites which should appeal to those developers and investors uncomfortable with central Africa.

Kalgoorlie-Norseman Cobalt Region

Located in the Eastern Goldfields region of Western Australia, approximately 16km north-west of Norseman. The area encompasses multiple adjacent mineral exploration tenements. The cobalt rich section of this area are currently owned by the Mt Thirsty Joint Venture (MTJV), a 50:50 joint venture between Barra Resources Limited (ASX: BAR) and Conico Limited (ASX: CNJ) and across their tenement boundary an extension of the same resource owned by Galileo Mining Ltd (ASX: GAL). They hold an additional 12.5MT of indicated and inferred resource. As well, Galileo own a further 12.6 MT of inferred resources in adjacent tenements.

Geological indicators suggest that additional cobalt exists within this prolific mining region. Further exploration will be required to map out potential new supplies of cobalt to supplement the substantial resources currently owned by all three companies. 

The Project is close to all necessary infrastructure (rail, road, power, gas, water, townsite, fibre optic, airport and seaport) and, being in a mining orientated state, has the potential to attract a variety of interested parties including end users of cobalt.

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Pre-Feasibility Study

A Pre-feasibility study (PFS) for the MTJV Mt Thirsty Cobalt-Nickel Project was completed in February 2020. The PFS returned a positive pre-tax Net Present Value with a low capital cost of $371 million (including direct costs, growth allowance, owner’s costs and 10% Contingency) (refer to BAR ASX announcement dated 20 February 2020). 

This makes the region one of the most advanced cobalt projects in Australia and a high value development opportunity for a large global firm, eager to secure a guaranteed sustainable source of cobalt.

The MTJV opted to test atmospheric leaching as the preferred process in the 2020 PFS, principally based on reducing the capital outlay. However, the decision does not rule out other processing techniques, notably HPAL. The principal tenement owners in the region have decided to adopt a flexible attitude to any corporate development pathway that may interest a potential suitor. Simple arithmetic by aggregating the resource tonnages spread across the entire Mission Sill may open up potential for alternative flowsheet processing designs. 

We encourage groups to make enquiries now. Click here to find out how you can access the 2020 PFS in full.

We invite you to get in touch to discuss any potential development opportunities

3D isometric of the Mt Thirsty processing plant showing generalised process flow (numbered labels)

Schematic Process Flowsheet for Mt Thirsty

MTJV Mineral Resource

Mineral Resource
Classification
Cut-off (Co%)
Tonnes (Mt)
Cobalt Nickel
(%) Tonnes (%) Tonnes
Mt Thirsty Main
Indicated 0.06 22.6 0.12 26,200 0.53 119,800
Inferred 0.06 2.5 0.10 2,500 0.44 11,000
Sub-Total 25.1 0.11 28,700 0.52 130,800
Mt Thirsty North Inferred 0.06 1.5 0.09 1,400 0.55 8,200
TOTAL JORC (2012) Mineral Resource
26.6 0.11 30,100 0.52 139,000

Galileo Mineral Resource

Mineral Resource
Classification
Cut-off (Co%)
Tonnes (Mt)
Cobalt Nickel
(%) Tonnes (%) Tonnes
Mt Thirsty Sill
Indicated 0.06 10.5 0.12 12,100 0.58 60,800
Inferred 0.06 2.0 0.11 2,200 0.51 10,200
Sub-Total 12.5 0.11 14,300 0.57 71,100
Mission Sill (Unicorn) Inferred 0.06 7.7 0.11 8,200 0.45 35,000
Goblin Inferred 0.06 4.9 0.08 4,100 0.36 16,400
TOTAL JORC (2012) Mineral Resource
25.1 0.11 26,600 0.49 122,500

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Barra Resources

Ground Floor, 6 Thelma Street, West Perth, WA 6005
Email: barraadmin@barraresources.com.au
Web: www.barraresources.com.au
Tel: +61 8 9481 3911

Galileo Mining

13 Colin Street, West Perth, WA 6005
Email: info@galileomining.com.au
Web: www.galileomining.com.au

Tel: +61 8 9463 0063

Conico Ltd

Level 15, 197 St George’s Terrace, Perth, WA 6000
Email: mailroom@conico.com.au
Web: www.conico.com.au

Tel: +61 8 9282 5889