First Cobalt Corp (CVE:FCC) (OTCQX:FTSSF) (FRA:18P) reported that it has a signed a supply agreement with Glencore AG, along with a tentative pact with a unit of China Molybdenum Ltd (CMOC), in which First Cobalt will receive 4,500 tonnes of cobalt hydroxide per year from the Democratic Republic of the Congo for use in its northern Ontario refinery beginning in 2022.
First Cobalt said its refinery, once operational, will be North America's only producer of cobalt sulfate for the electric vehicle (EV) market.
“This is a pivotal moment for our North American cobalt refining strategy. Our globally competitive cost structure and industry-leading ESG credentials put us in a strong position for a rapidly growing EV market. With feedstock arrangements in place, we can continue to advance our vision to create a new cobalt supply chain in North America,” said First Cobalt CEO Trent Mell in a statement.
He added: “Electric vehicle sales in Europe were up more than 100% in 2020 and the U.S. will be the next large market to take off. We are now focused on offtake arrangements and the financing package with the goal of commencing construction in mid-2021 and full commissioning in the second half of 2022.”
The contained cobalt, which will be provided from Glencore's KCC mine and CMOC's Tenke Fungurume mine in the Democratic Republic of the Congo, is expected to supply 90% of the 5,000 tonnes per year of projected capacity for the Canadian refinery while yielding 22,250 tonnes annually of battery-grade cobalt sulfate.
Under the terms of the binding cobalt hydroxide supply contract, Glencore will supply the First Cobalt Refinery from the KCC mining operation for five years beginning in 4Q 2022.
First Cobalt also said it will work to complete a definitive contract with CMOC for cobalt supply over the same time period.
First Cobalt noted that offtake discussions, financing and permitting for its refinery are proceeding on schedule, with construction expected to start in mid-2021.
The company added that in keeping with its strategy of producing the world's most sustainable cobalt for electric vehicles (EVs), the First Cobalt Refinery will qualify under the Responsible Minerals Initiative (RMI), for clean and ethical supply, and said Glencore's KCC mine will undergo a RMI audit early this year as part of its commitment to the RMI.
First Cobalt announced recently that it will receive C$10 million in public funding from the Canadian federal government and the government of Ontario to accelerate construction of its Canadian cobalt refinery.
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