This article covers the second part of our recent exclusive online interview with Mr. Joe Kaderavek, CEO of Australian Cobalt Producer, Cobalt Blue Holdings.

 

→ Read Vol.1 from the link below

 

 

Q5

MIRU: Regarding your partnerships and contracts, we can see some company names such as Mitsubishi and Sojitz in your presentation file. Does it mean that you already have contracts with them to sell your product? Also, are there any other partnerships with other companies?

 

Kaderavek: We have 15 partners who wish to take sample from us. In the next 6 weeks, we will be shipping our first cobalt mixed hydroxide, which is an intermediate product, and our first cobalt sulphate. So, behind that programme are 15 partners who typically want 2 to 5 kg. Three of those partners have consented to be named.

 

One is LG International. LG has been a shareholder for a number of years. The other two correctly as you’ve said are Sojitz corporation and Mitsubishi corporation. In no case is any of the cobalt offtake spoken for, we are a 100 % free in the sense of none of it has been committed.

 

The only tonnage that has been committed is sample, so, for example, Mitsubishi Corporation, we are dealing with their sulphur team in Tokyo, and our partnership is to provide for Mitsubishi one hundred tonnes of trial sulphur. Our partnership with LG is to provide a sample, and that will be 5 kg. Our partnership with Sojitz is to provide samples for their clients, so that could be 5 lots of 5 kg.

 

But at this stage, we have no firm commercial offtake, nor do we have any project partners at a joint venture level. And this is where we are very excited because we believe that next 3 to 6 months could be a big change for our business, and that change starts with us with our sample programme.

 

Once we’ve shown the world that we can make a high-quality cobalt sulphate, I think that we will be able to take on partners at the project level, but also offtake.

 

 

Q6.

MIRU: Cobalt is largely used for batteries, but also can be used for other purposes such as magnet etc. Are you planning to sell your cobalt product solely for batteries or for other purposes as well?

 

Kaderavek: In the cobalt production chain globally, there is a fork in a road, and the fork is a hydroxide product. Once you process hydroxide, you must either make a metallurgical cobalt, for example a metallic hard-facing tool, a super alloy, and those uses are about 40 % of the market. So, about 40 % is metallic cobalt. From the hydroxide, if you make a sulphate, or an oxide, if you make a sulphate, you’re making batteries – you are making chemical cobalt.

 

So, our process allows us to make the hydroxide, and we are aware that about 70 % of the world cobalt is traded as a hydroxide. Most of that from the DRC. So, that’s a very tradable product. But we want to add value to that, and capture the margin, and effectively make a sulphate. And in adding value and making a sulphate, we also eliminate what is predominantly Chinese infrastructure. We can sell directly from Broken Hill to a precursor maker in Japan. We can sell directly to Tanaka, Nichia, Sumitomo, we can sell directly to them without having to refine in China or elsewhere.

 

 

Q7.

MIRU: Cobalt mining has always been dominated by DRC, and China also has such a stronghold on the industry. Today we are very glad to know the existence of an Australian company like yourself. Cobalt Blue has such a unique presence and, as Australia and Japan have always maintained a great friendship, it’s very good to know you not only for ourselves but also for other Japanese companies.

 

Kaderavek: I agree fully with what you’ve said. I’ll also add to what you’ve said by the Japanese and to some degree the Korean experience in cobalt has been traditionally quite poor. So, your questions about our metallurgy are very well taken, because they’re exactly what we are hearing from our commercial partners. “We want your project to succeed, but we don’t trust that the metallurgy is robust. Please show us the metallurgy”.

 

This year we are going to make some small product from our pilot plant, in the next two months, by the end of the year we have a much larger scale demonstration plant, which we hope to produce, we will consume 3 thousand tonnes of ore and to make 2 to 3 tonnes of product. That’s a scale of demonstration that has never been done before in cobalt.

 

 

Q8.

MIRU: If we may ask about other companies in Australia, are there any other cobalt mining start-up companies like Cobalt Blue? Is it like a new trend in Australia, or is your company just special and unique?

 

Kaderavek: We are the only cobalt sulphide ore body, so everybody else is a laterite. And, which means everybody else is a nickel producer, who has some cobalt. We are one of two projects in the world, which are primary cobalt. The only other project in the world that makes this much leverage of cobalt is the Kingdom of Morocco. Believe or not.

 

There are lots of developers in Australia and Canada, who have nickel mines, with some, typically 10 %, maybe 15 % of byproduct cobalt. But, be very careful of the laterites. You then have very large capital budgets typically 2 billion dollars or more. And, a process which has really yet to be proven on a large scale.

 

 

Q9.

MIRU: As a Japanese media outlet specialising in mining, resources and so on, we would like to become a bridge between Australian and Japanese companies. Do you have anything that you’d like to convey to Japanese companies?

 

Kaderavek: Thank you for the offer. My main objective today is education. Helping the market understand, investment and commercial market understand that there is a new large project coming out of Australia. We are effectively producing three and a half thousand to four thousand tonnes of cobalt metal, which we’ll sell as a sulphate which we talked about, that’s about 17,000 tonnes of cobalt sulphate, that would make us a top 10 mine, and would make us maybe one of two or three mines in the world that make a sulphate, the rest make an intermediate.

 

We’re the only mine of any size coming on outside of Africa, all of the other big mines coming on are in Africa. So, it’s important in my job that we educate both commercial partners, but also investors that there are “ethical alternatives” to DRC ore. I would stress that not all product from the DRC is unethical, clearly there is some good product there as well. But, nevertheless, we are a new project. We are less than two years away from an investment decision, and we hope in that time frame to have a partner, that will help us in the build and commission phase.

 

So, we have to be in production in 2024, 2025, and make a product that we can sell to the leading battery manufacturers of the world. So, really that’s all I have to say – it’s an education for us, it’s a privilege for me to be here to speak to you. I’ll be more than happy to follow up if you need to, and it’s really just an understanding, letting people know that here we are and the product is coming. I think in the next six months with our sample programme, we’ll get a lot of headlines.

 

 

Q10.

MIRU: We regularly hold webinars. As a host, we usually invite Japanese companies as guests. If the opportunity arises in the near future, we would like to invite you as a guest and open a dialogue with Japanese companies, or potential Japanese customers.

 

Kaderavek: I would appreciate the opportunity.

 

 

Q11.

MIRU: We would like to hear about your background, if possible. As an FYI, Mr. Katagiri is originally from Mitsubishi Material Corporation(MMC).

 

Kaderavek: My background is, I’m an aeronautical engineer, which is a strange background to have in mining, but it gave me a material science background effectively. And that was important in this role.

 

I spent some years in the Air Force in Australia, and then I moved in to a mining role and I spent time with Rio Tinto, with BHP and others. And very simply I moved a lot of dirt. And I know that sounds almost comical, but moving dirt is   cost management. It’s a materials management dilemma, and certainly in the job that I have, we are trying to create a business from 800 parts per million cobalt, so it’s moving a lot of dirt.

 

Subsequent to that, I was head of Resources at Deutsche Bank in Asia, and subsequent to that, I run a hedge fund, where we did a lot of work in energy storage and energy systems.

 

 

Q12.

MIRU: So, that’s all from us today. We truly hope that we can keep in touch and continue having a good relationship with you. Is there anything particular that you would like to mention to us?

 

Kaderavek: I think, what I’m seeing is that you are a very specialist organization in resources and metals’ processing, and I think that you’re a good partner for us again in that education, information share. So, I’m more than happy to help you, and I’m happy very much we had a meeting today. Thank you.

 

MIRU: Thank you very much.

 

 

 

 

(Interviewers: Yuji Tanamachi & Tomoki Katagiri, Transcription by A.Crnokrak)