UK-based trader Stratton Metal Resources will sell around 5,000 tonnes per year of cobalt sulphate produced by First Cobalt in Canada, Kallanish learns from senior traders at Stratton.  

The companies have signed a “flexible” five-year deal, under which Stratton has the option to sell up to 100% of First Cobalt’s new refinery production in Ontario once it’s operational. The agreement provides flexibility for First Cobalt to enter into offtake contracts with OEMs and their suppliers, reducing amounts made available to Stratton Metals.

According to the Canadian company, volumes under the deal will be determined by First Cobalt in advance of each calendar year and subject to a minimum annual quantity. The cobalt sulphate will be priced based “on prevailing market price at the time of shipment,” adds First Cobalt, in a release later on Monday.

Stratton Metal Resources specialises in the pre-finance, offtake and marketing of base metals, focusing particularly on nickel and cobalt. In the words of First Cobalt’s ceo Trent Mell, the company is among the “most knowledgeable cobalt traders in the world, with a network of relationships in every major market.”

The commercial arrangement supports the financing process for the refinery expansion, adds Trent, while also noting the facility is on track to start-up in October 2022.

Previously, First Cobalt had said the refinery would be operational “as early as 2021” and would produce up to 25,000 t/y of battery-grade cobalt sulphate. This volume represents over 5% of all cobalt produced around the world, of which a large majority is produced in the Democratic Republic of the Congo.

The facility will make First Cobalt the first local producer of refined cobalt for the North American electric vehicle market. “Today, approximately 80% of cobalt sulphate is made in China and there’s not production in North America,” the company explains.