Battery metals developer Australian Mines (ASX: AUZ) takes the next step in studies to become Australia’s one-stop-shop for precursors under its proposed Sconi project in Queensland.
It is set to begin Pre-Feasibility Studies (PFS) later this year after today releasing a scoping study focused on exploiting Sconi’s unique Nickel-Cobalt-Manganese (NCM) mineral composition for to provide more refined and higher value active precursor cathode materials. (P-CAM) for NCM battery customers.
Australian Mines tested the potential to take a further step in the electric vehicle precursor supply chain by replacing P-CAM production with the sulphate crystallization step, such as nickel, cobalt and manganese sulphates. , the type of battery-focused material currently produced by BHP.
Instead, AUZ has demonstrated its ability to provide P-CAM products for NCM 523, NCM 622 and NCM 811 battery chemistries used throughout the electric vehicle industry.
This comes at an opportune time for the electric vehicle industry with looming supply constraints around battery grade nickel and cobalt from 2023. This projected shortage of nickel and cobalt is creating very favorable market momentum and further supports the direct debit agreements signed by the end of the year.
Promising framing figures put in place PFS
This would involve replacing the nickel and cobalt crystallization circuit proposed by Sconi with a P-CAM production facility.
Today’s study highlights Sconi’s potential to generate significantly higher revenues and margins over the life of the project for additional capital and operating costs.
The P-CAM facility described an increase of $ 104.6 million in capital costs and $ 46.8 million per year in operating costs by following this path.
But the discounted return on investment is estimated at just 1.8 years, with consultants CRU and Ausenco estimating that the company would receive US $ 18,800 / t for its NCM 622 product and US $ 16,500 / t for its NCM 811.
To put this in context, the expected prices for nickel sulfate and cobalt sulfate would be US $ 3,684 / t and US $ 15,540 / t, respectively.
At 25,708 tpa of NCM 811 and 4,778 tpa of NCM 622 and operating costs of $ 1,717 / t, this would generate additional EBITDA of over $ 1 billion with an NPV of $ 352 million.
Based on the promising scoping results, the company said it is now moving quickly to begin a more detailed PFS, with a timeline expected to be finalized in the September quarter.
This article was developed in collaboration with Australian Mines, an advertiser for Stockhead at the time of publication.
This article is not advice on financial products. You should consider getting independent advice before making any financial decisions.
