World demand for cobalt is increasing with technological advances in products such as rechargeable batteries and superalloy metals, and yet more than 60 percent of world cobalt supply comes from countries with high levels of political and technical risk.
ASX-listed Broken Hill Prospecting (BPL) is the 100 percent owner of several large and near-surface cobalt deposits located near Broken Hill in western NSW which have the potential to securely provide up to 10 percent of world cobalt supply.
Dr Ian Pringle, BPL’s managing director, says that the USA, Japan and Europe are the world’s greatest consumers of cobalt – with China increasing rapidly – and yet do not have their own source. These countries, says Dr Pringle, rely on supplies out of Central Africa.
“Broken Hill Prospecting is well placed to become one of the world’s largest cobalt producers and provide an alternative and secure source for the world’s future cobalt supply,” he says.
BPL’s cobalt deposits are close to excellent infrastructure, such as the transcontinental railway and only 25 kilometres from the town of Broken Hill. The deposits are close to the surface and can be accessed through open cut mining.
The BPL cobalt deposit, known as Thackaringa, mineralises within pyrite – or fool’s gold – and can then be readily processed down to a pyrite concentrate which contains 0.5 percent cobalt.
Further processing also produces sulphuric acid, large quantities of which are also in high demand at some of the largest mining projects in the world as well as by fertiliser producers.
BPL’s Ian Pringle says the company’s business plan is to find customers for off-take agreements, and for those deals to fund the development of the project, including the construction of a processing plant.
BPL was currently producing a “scoping document” on the deposits and the costs of the processing plant, and would present that to potential off-take partners.
“So what we are trying to do is to get a number of off-take purchase agreements from end users of either cobalt or sulphuric acid who wants security of supply into the future,” Dr Pringle said.
“We don’t want to dilute our shareholding. We want to use the funds from the large groups who want our product to develop the project.
“We think we are quite unique because we have these unusual deposits which don’t occur readily anywhere else, so if anyone wants to put their foot on this resource then they really have to come and talk with us.”
Dr Pringle said he was optimistic that after completing the scoping study and presenting that to potential customers, BPL might begin producing a pyrite concentrate in 2014.
BPL listed on the ASX and NZX after a $4.47 million capital raising.
To know more about Broken Hill, please click here.