Tiny iron ore explorer Haranga Resources is buying a project prospective for nickel and cobalt in the Eastern Goldfields region of Western Australia.

Haranga (ASX:HAR) has struck a conditional deal to buy the Mount Windarra project, where “significant cobalt and nickel mineralisation” has been intersected in drilling.

Cobalt is used in making rechargeable batteries for electric cars and thermally resistant super alloys for industry and aircraft engines. Demand for electric car batteries is expected to drive demand for cobalt eight-fold by 2025.

Stainless steel accounts for 70 per cent of global nickel demand — though it is also used in electric car batteries.

To settle the transaction, Haranga will issue 3 million shares at 2c each, valuing the acquisition at $60,000.

Haranga plans to undertake a 150-to-1 share consolidation followed by a 15-for-1 rights issue at 2c per share.

The company is aiming to have the deal completed by the end of January.

Haranga had $269,000 in the kitty at the end of September. The company has been contacted for comment.