BPL targets cobalt market edge

Broken Hill Prospecting seeks to corner the world cobalt market following an export ban in Congo, the metal’s largest producer

BPL targets cobalt market edge
BPL targets Cobalt market edge

By Anna Game-Lopata | July 30, 2013

Broken Hill Prospecting Limited (BPL) seeks to corner the world cobalt market following an export ban in the Congo, the metal’s largest producer.

The Democratic Republic of Congo (DRC) government announced bans on the export of both cobalt and copper concentrates in April, significantly impacting the supply and demand of cobalt along with its price.

During 2012 the DRC was the largest cobalt producer with over 60 percent of the world’s production.

The country was also the eighth largest copper producer, with copper production of approximately 500,000 tonnes per year.

In order to avoid the ban, Freeport-McMoRan, the largest cobalt producer in the DRC must show cobalt hydroxide produced at its Tenke Fungurum project is a ‘finished product’.

The new ruling could potentially impact the Freeport’s recently acquired Kokkola cobalt refinery in Finland.

Meanwhile, in Australia, Broken Hill Prospecting Managing Director Dr Ian Pringle says his company "has no interest in cobalt mines or prospects in the DRC".

"However, BPL does have 100 percent ownership of the largest undeveloped stand-alone cobalt deposit outside of the DRC," Dr Pringle says in a statement to the ASX.

"As such BPL could
benefit from supply and demand issues relating to the DRC [export ban]".

BPL’s resource base was recently estimated as 35.7 million tonnes of cobalt-pyrite mineralisation with an average grade of 1.85 pound per tonne cobalt.

This equates to over 30,000 tonnes of contained cobalt metal.

While BPL is currently seeking a partner to develop a world-class sulphuric acid production project, Dr Pringle says recovery of cobalt, hematite ash and electricity could add considerable value.

"Australia is a net importer of sulphuric acid which is required in many fertiliser, mineral processing and industrial applications," he says.

"BPL’s future cobalt-pyrite concentrate could supply a sulphide ‘roast’ plant for long term sulphuric acid production.

"Additional value could be added by by-product production of high-iron hematite/cobalt ash as well as ‘zero’ carbon electricity produced from heat generated by pyrite-roast processing."

Pringle adds BPL’s Thackaringa cobalt-pyrite deposits are well located beside road and rail and can be mined using simple open cut methods.

He says they can produce sulphuric acid without significant heavy metal, arsenic or other deleterious biproducts, offering long-term security of acid supply.

"BPL is in an excellent position to take advantage of an increasing demand for cobalt and sulphuric acid to meet growth in environmental and industrial uses ranging from rechargeable batteries in automobiles to fertiliser production," Pringle says.

"BPL is among the next generation of companies that is exploring for major new mineral deposits near the historic western NSW mining centre of Broken Hill, where more than 200 million tonnes of highgrade base metal ore worth an estimated $80 billion has been produced during the past 127 years."

Pringle says the project has attracted several sulphuric acid market leaders, some of whom will assess project viability and possibly assist in feasibility studies and business development.

Discussions with several international industrial groups are expected during the next several weeks.

Overall, there has been a general increase in demand for sulphuric acid with world consumption increasing by about 58 percent
between 1990 and 2011.

Cobalt Statistics

Cobalt is used in a wide range of industries, including production of super alloys and hardened metals where high heat and wear tolerance is required such as aircraft, turbines, windmills and
military hardware.

Other uses include high-strength magnets, carbides and diamond tools, catalysts (petroleum production), colouring (cobalt blue), adhesive, soaps, driers and food supplements (vitamin B12).

  • Cobalt price (LME, 30 June 2013): US$31,250 per tonne (approximately $15 per pound. 1 pound = 0.4536 kilograms
  • Mines in Central Africa accounted for over 65% of cobalt production in 2011 and most came from
    the Democratic Republic of Congo.
  • The USA accounted for 58% of cobalt consumption in 2010
  • The USA, Japan, and the European Union have no producing cobalt mines.
  • China imported ore from Africa and produced 43% of refined cobalt production in 2010.
  • More than 95% of cobalt production is a by-product of copper or nickel mining.
  • Lithium-ion batteries contain up to 60% cobalt and will be widely used in the new generation of
    electric vehicles.

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