Stratton will buy all First Cobalt product
Offtake agreement offers option to sell cobalt sulfate to OEMs Metal Tech News – March 29, 2021
Last updated 4/6/2021 at 4:40pm
In another step toward its overarching goal to deliver battery grade cobalt into the North American electric vehicles market, First Cobalt Corp. has signed a flexible, long-term, offtake agreement with Stratton Metal Resources Ltd. for the sale of future cobalt sulfate production from the First Cobalt refinery in Ontario, Canada.
"Stratton Metals are among the most knowledgeable cobalt traders in the world, with a network of relationships in every major market," said First Cobalt President and CEO Trent Mell. "This sales arrangement is a key milestone for the company as firming up commercial arrangements supports the financing process for the refinery expansion."
Once expanded to full capacity, the First Cobalt refinery will be capable of producing 25,000 metric tons of battery-grade cobalt sulfate per year, which is more than 5% of current global cobalt production.
Being accessible by road and rail, less than 500 miles north of Great Lakes manufacturing towns such as Detroit and Buffalo, this globally significant refinery is well-positioned to deliver a metal critical to the performance and safety of lithium-ion batteries.
In January, First Cobalt inked an agreement with Glencore to supply enough cobalt hydroxide feed material for the refinery to produce 22,250 metric tons of the cobalt sulfate used in the cathodes of lithium-ion batteries, which represents about 90% of plant capacity.
Now, First Cobalt has secured an agreement that ensures a buyer for all the cobalt sulfate produced.
Under the agreement with Stratton, the London-based metals trader has agreed to buy up to 100% of the annual cobalt sulfate for five years once the First Cobalt refinery is in operation.
The agreement, however, provides First Cobalt with the flexibility to also sell its product to North American automakers and battery manufacturers.
Quantities to be sold to Stratton will be determined by First Cobalt in advance of each calendar year and are subject to a minimum annual quantity. The sale price will be based on prevailing market price at the time of shipment.
"We look forward to working with Stratton to supply the world's most sustainable cobalt to the electric vehicle market," said Mell.
Commissioning of the First Cobalt refinery is slated to get underway in October 2022.