Korab nixes phosphate deal to focus on battery metal magnesite

Korab Resources has axed a five-year deal to supply 250,000 tonnes of phosphate from a project in the Northern Territory.

The decision comes close on the heels of Korab’s (ASX:KOR) move to divest its non-core projects in Western Australia and Ukraine to focus on its magnesite project in the Territory.

The company told investors there was no penalty for terminating the supply deal, which it struck back in November 2015 with DPA Oceania.

Korab is now considering selling the project, known as “Geolsec”, along with its other projects.

Investors welcomed the news. Shares gained nearly 6 per cent to 5.5c on Friday morning.

Korab wants to focus on magnesite, which is traditionally used in magnesia cements, building materials, flame retardants and animal feeds and fertilisers.

But it is now also attracting attention for its use in magnesium-ion batteries.

Korab is planning to develop its Winchester project into a Direct Shipping Ore operation, which means it would require only a simple crushing and screening process before being exported.

An expanded study showed the project had “attractive economics” and the potential for pre-tax earnings of about $614 million over the life of the project.

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