MINEX Forum

Tag: cobalt

  • KazNickel to Begin Cobalt and Nickel Extraction at Gornostayevskoye Deposit

    KazNickel to Begin Cobalt and Nickel Extraction at Gornostayevskoye Deposit

    KazNickel, whose ultimate owner is Kenes Rakishev, has announced plans to commence cobalt and nickel mining at the Gornostayevskoye deposit in the Beskaragay district of the Abay region. According to the company’s latest reports, the sole participant in KazNickel is Battery Metals Technologies LTD, a Singapore-registered entity controlled by Rakishev.

    The Gornostayevskoye deposit, located 100 km west of Semey and 30 km southeast of Kurchatov, has a well-developed infrastructure. The company previously conducted pilot-scale extraction at this site. The new project envisions the development of the left-bank section of the deposit using underground borehole leaching, with an annual production target of 10,000 tons of cobalt and nickel. The left-bank section covers an area of 26.25 square kilometers, and sulfuric acid will be used in the leaching process to extract the valuable ions directly underground without bringing the ore to the surface.

    Between 2026 and 2046, KazNickel plans to drill 32,900 boreholes, each with a depth of 15-40 meters and a diameter of 16.8-24.4 cm. The company will strip the topsoil to a depth of 20 cm before drilling, storing it outside the drilling area.

    In 2022, KazNickel reported plans to begin nickel concentrate production in 2023. The company also noted a significant increase in nickel prices on the global market starting in early 2022. However, the first phase of the project, from 2026 to 2035, is currently the focus. In 2019, KazNickel extended its pilot mining operations until 2022, and the Ministry of Industry and Infrastructure Development began reviewing contract amendments in 2022 to transition to the production phase.

    KazNickel plans to use 19,500 cubic meters of water during the first phase, most of which will be technical water (17,300 cubic meters). The company recorded a loss of 263.3 million tenge in 2022, an improvement from a 1.4 billion tenge loss in 2021, with cumulative losses totaling 3.4 billion tenge by the end of 2022. Its total assets decreased to 3.3 billion tenge at the end of 2022, down from 3.8 billion tenge a year earlier.

    As of December 31, 2022, the Gornostayevskoye deposit’s cobalt-nickel ores had identified mineral resources of 470,300 tons of nickel with an average grade of 0.57% and 32,300 tons of cobalt with an average grade of 0.039%, recognized by the state accounting of Kazakhstan’s subsurface resources.

    To continue the development, KazNickel received loans from related parties — Fincraft Resources and Ertis Ferroalloy Plant. On January 13, 2023, the sole participant decided to admit a new participant, Mining Technologies Company, by redistributing shares. The new participant committed to increasing the company’s charter capital by 4.7 billion tenge, which was 6 billion tenge at the end of 2022, in exchange for a 26% stake. The actual funds were received from Mining Technologies Company in March 2023.

    Kenes Rakishev ranks 19th among Kazakhstan’s wealthiest individuals, according to Forbes, with a net worth of $435 million. He solely owns Fincraft Group, through which he controls 78.85% of Fincraft Resources and BTA Bank.

  • The U.S. Cobalt Mine Struggles Amidst Chinese Market Dominance

    The U.S. Cobalt Mine Struggles Amidst Chinese Market Dominance

    The only cobalt mine in the United States, located in northern Idaho, remains dormant as Chinese competitors flood global markets with cheap cobalt supplies. Jervois Global, which owns the mine, watched cobalt prices plummet last year after China’s CMOC Group opened the Kisanfu mine in the Democratic Republic of Congo, driving global production to an all-time high. The Idaho site, acquired by Jervois in 2019, was idled in June 2023, just weeks before its planned opening, resulting in over 250 job losses. A minimal crew now maintains the site’s equipment to prevent deterioration.

    Site manager Matthew Lengerich stated that the decision was purely economic, with cobalt prices needing to reach at least $20 per pound to justify reopening, while current prices hover around $12.17. Western mining companies like Jervois and Albemarle face significant challenges competing with Chinese companies, which benefit from lower costs, including the use of coal-generated electricity and child labor, practices not tolerated by many Western governments and manufacturers.

    The disparity has led to calls for a two-tier pricing system, which would impose a premium on metals produced sustainably. This system could change traditional metal trading practices and create varying definitions of “green metal.” Western mining leaders have sought government intervention, including tariffs or supply chain transparency requirements, to level the playing field. US and EU officials have shown some understanding but have been reluctant to intervene directly in market pricing.

    Automakers and other industry customers are increasingly concerned about securing diverse and sustainable metal supplies. By 2027, the European Union will require EV manufacturers to disclose the origin and carbon footprint of the metals they use, potentially driving demand for premium-priced, sustainably sourced metals. Some companies, like Northern Graphite and Teck Resources, are already capitalizing on this trend by selling sustainably sourced materials at a premium.

  • New Nickel-Cobalt Deposit in Aktobe Region to Begin Development in 2025

    New Nickel-Cobalt Deposit in Aktobe Region to Begin Development in 2025

    A mining company plans to start extracting silicate-nickel ores from the Jusalinskoye deposit in 2025. The licensed area is located in the Aktobe region, and the project documentation has been published on Kazakhstan’s Unified Environmental Portal.

    The company plans to mine metals for 20 years. The reserves of the Jusalinskoye deposit were put on the state balance sheet in 2015 and amount to 44.2 thousand tons of nickel and 2.57 thousand tons of cobalt. Development will be carried out using open-pit mining due to the shallow occurrence of the components.

    By the fourth year, it is planned to achieve maximum annual productivity of the quarry, with over 63 thousand tons of ore expected to be sent for processing annually.

    The company “KazMetallGroup” previously announced a similar project and owns another nickel-cobalt deposit, Novo-Buranovskoye, in the same region. It is expected that the ore from both sites will be processed at a single mining and processing plant.

  • Explained: The EU’s handicap in the global race for critical raw materials

    Explained: The EU’s handicap in the global race for critical raw materials

    The EU is highly dependent on third countries for the raw materials needed to engineer its energy transition and digital transformation.

    Russia’s war in Ukraine and the need to wean itself off fossil fuels in order to reach climate targets have prompted the EU to accelerate its green transition in recent months but also forced it to acknowledge its dependencies over access to critical raw materials.

    In the global race for raw materials, the EU faces multiple challenges.

    The first one is China, which recently started restricting exports of gallium and germanium, two metals essential for the production of semiconductors, in response to Western curbs on Beijing’s access to micro-processing technology.

    The EU considers both materials of high strategic importance. As well as semiconductors and other electronic devices, they are used for military applications such as missile defence and radar systems.

    Beijing’s restrictions come as a stark warning as the EU attempts to diversify and boost domestic supply of raw materials to reduce dependency on third countries.

    Reliance on ‘low-governance’ countries

    But diversifying supply chains could mean the EU has to source these materials from countries that don’t adhere to the same standards.

    Recent data suggests the EU’s supply is highly dependent on countries that have a low governance level, based on indicators including political stability, rule of law and corruption control.

    The EU’s Critical Raw Materials Act (CRMA), adopted in March this year, stipulates that EU strategic projects to scale up supply must be assessed taking into account all aspects of sustainability, including environmental protection, socially responsible practices and respect for human rights such as the rights of women.

    But many countries feeding EU supply are not aligned with European values. This raises concerns about the impact on the local communities where materials are mined, as well as the potential exploitation of natural resources.

    For example, the Democratic Republic of Congo, whose governance indicators are among the lowest in the world, supplies 63% of the EU’s cobalt, which is essential for manufacturing batteries for electrical vehicles.

    Diversifying supply a challenge

    The EU is also highly dependent on single countries for key materials such as Magnesium (China, 97%), Lithium (Chile, 97%), Iridium (South Africa, 93%) and Niobium (Brazil, 92%). These dependencies make supply chains vulnerable.

    The Critical Raw Materials Act aims to ensure no third country provides more than 65% of the Union’s annual consumption of any raw material.

    But diversifying supply is complex when refineries of many essential materials are monopolised by one or more global powers. China dominates the refining market for many critical raw materials.

    Russia’s invasion of Ukraine and the ensuing energy crisis has shown the acute dangers of over-reliance for supplies of raw materials. China’s increasingly antagonistic stance and the political instability in many African countries have also served as reminders of the fragility of the EU’s trading relationships.

    A spiralling global demand

    The demand for raw materials is growing steeply, as developed countries race to digitalise and decarbonise their economies. This can only happen with sufficient supply of raw materials, meaning countries must scale up extracting, refining and recycling operations.

    The global demand for lithium, for example, is set to increase a staggering 89-fold by 2050, according to the European Commission. Demand for gallium will multiply 17-fold during the same time.

    The Critical Raw Materials Act sets targets for the Union to extract 10%, process 40% and recycle 15% of its annual consumption of raw materials by 2030.

    To meet these targets and compete on the global stage, European Commission President Ursula von der Leyen has said the EU needs to speed up investments in research and development, recognising that the bloc’s global share of R&D expenditure has fallen 10% in the last 20 years.

  • Construction of a hydrometallurgical plant for the production of cathode nickel and cobalt

    Construction of a hydrometallurgical plant for the production of cathode nickel and cobalt

    [vc_row][vc_column][vc_column_text]Source: Kazakh Invest[/vc_column_text][vc_column_text]Products

    Annual capacity:

    • Cathode nickel – 6,220 tons;
    • Cathode cobalt – 250 tons;

    Project

    The project provides for the construction of a hydrometallurgical plant for the production of cathode nickel and cobalt on the basis of the large Belogorskoye deposit. The company intends to send up to 100% of its products for export, mainly to China.

    Company

    The initiator is Belogorskoye LLP, whose main activity is the extraction of other non-ferrous metal ores. The initiator has license No. 326-EL dated October 1, 2019 for the exploration of solid minerals at the Belogorskoye deposit until November 26, 2025 (four blocks: M-44-91-(10v-5a-17, 18, 22, 23) .

    Market

    • In the last 5 years, China has been the world’s leader in nickel consumption. At the end of 2021, the volume reached 1,682 thousand tons, which is 59% of the world indicator. Metal consumption in China continuously increased from 1.2 Mt in 2017 to 1.7 Mt in 2021 at a CAGR of 9.2%.
    • The target market (China) is the world leader (about 50%) in stainless steel smelting, consuming 1.2 million tons of nickel (2021), and in the production of batteries for electric vehicles (metal consumption in the amount of 277 thousand tons).
    • Global cobalt consumption increased from 128 kt in 2017 to 175 kt in 2021, reaching a CAGR of 8.1%. Cobalt demand is expected to continue strong growth due to the global transition to electric vehicles and is expected to approach 317 kt in 2026.

    What is the attraction of the project?

    • Availability of subsoil use rights for exploration. The initiator is a subsoil user with a license for the exploration of solid minerals (nickel and cobalt) at the Belogorskoye deposit No. 326-EL dated October 1, 2019.
    • Evaluation of deposit reserves. The reserves were put on the state balance sheet in 2019. Belogorskoye is one of the richest nickel-cobalt deposits in Central Asia. The deposit has 48 thousand tons of approved reserves of nickel in category C2. The volume of balance and off-balance reserves of the deposit exceeds 80 thousand tons of nickel and 3 thousand tons of cobalt.
    • Geographic location. The project has an advantageous location in terms of geographical proximity to China, the main consumer of metals.

    Investment offer

    To implement the Project, funding in the amount of USD 99,935 thousand is required:

    • 70% (USD 69,954 thousand) – debt financing (subject to collateral);
    • from 30% (USD 29,980 thousand) – investor participation.

    The proposed financing structure and state support measures are indicative, the final financing structure and the stake in the Project will be determined based on the results of joint negotiations with the investor.[/vc_column_text][/vc_column][/vc_row]