Eyeing China Moly Contract, First Cobalt Signs Supply Deal with Glencore

Canada's First Cobalt Corp said it signed a deal with Glencore and has agreed on a tentative pact with a unit of China Molybdenum Ltd (China Moly) for cobalt supplies from the Democratic Republic of the Congo.

China Moly is a joint stock company established in the People's Republic of China in 2006. The Company is primarily engaged in the mining and selecting, smelting and deep processing of molybdenum, tungsten, copper, cobalt, niobium and phosphorus minerals. It possesses a relatively complete and integrated industry chain. The Company represents one of the leading molybdenum producers, one of the top five molybdenum producers, one of the largest tungsten producers and the second largest cobalt and niobium producer in the world.

First Cobalt is a North American cobalt company and owner of the only permitted primary cobalt refinery in North America. The Company is exploring a restart of the refinery in Ontario, Canada, which could produce over 25,000 tonnes of cobalt sulfate per year from third party feed. The main cobalt exploration project is the Iron Creek Cobalt Project in Idaho, USA, which has an Indicated resource of 2.2 million tonnes at 0.32% cobalt equivalent.

Before reaching the agreement, First Cobalt received a government loan and grant of 10 million Canadian dollars last month to accelerate the start-up and expansion of North America's refinery in Ontario, Canada. Congo (DRC) is the world's largest producer of cobalt, and cobalt is a key component of lithium-ion batteries that constitute the rapidly growing electric vehicle industry.

Toronto-based First Cobalt said it will purchase cobalt hydroxide from Glencore's Kamoto Copper Co. at a five-year market price starting in the fourth quarter of 2022. The Canadian company also said it aims to complete a definitive contract with China Moly subsidiary IXM SA for cobalt from CMOC's massive Tenke Fungurume mining operation in the DRC over the same period.

It is not clear how many resources each mine will supply of Glencore. First Cobalt did not disclose specific figures. The company said that the agreements represent 90% of the Canadian plant's projected capacity, yielding 22,250 tonnes per year of battery grade cobalt sulphate. Construction at the C$77 million plants, about 600 kilometers from the U.S. border, is slated to start in mid-2021.

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