ScoMo delivers $120m ‘major vote of confidence’ for Kalgoorlie battery material refinery, Poseidon well placed to be major beneficiary
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Poseidon Nickel is in prime position to benefit from $120m in Australian government funding for a proposed battery cathode active material refinery hub in Kalgoorlie.
Yesterday Prime Minister Scott Morrison delivered the very welcome news as part of his election campaign that Pure Battery Technologies (PBT) would receive a multi-million-dollar cash contribution for the development of its proposed refinery in Kalgoorlie, WA.
Poseidon Nickel (ASX:POS) has been working with PBT since mid-last year to investigate the suitability of nickel concentrate from Poseidon’s Black Swan and/or Lake Johnston projects as feed for the refinery.
Managing director Peter Harold said the grant was a major vote of confidence by the federal government supporting PBT’s plans for the Kalgoorlie precursor Cathode Active Material (pCAM) Hub.
“This project will add significant value to the battery minerals it processes, and Poseidon is well placed to be a major beneficiary given it has the potential to be a significant supplier of feed to PBT’s proposed pCAM Hub from our existing 400,000 tonne nickel resource base and nickel concentrators at Black Swan and Lake Johnston,” he said.
“Given the nature of the processing route, being direct to pCAM, and the proximal location of the proposed pCAM Hub to our mines, there is an opportunity to enhance the margins on our concentrates.”
The news sent Poseidon Nickel shares up nearly 13% on Thursday morning to an intra-day peak of just under 10c.
Queensland-headquartered PBT, which has a nickel and cobalt refining operation in Germany, is targeting initial production of up to 50,000 tonnes per annum of pCAM, with the potential for expansion over time.
PBT made a submission in September last year for a grant under the Modern Manufacturing Initiative – Manufacturing Collaboration Stream to assist with the development of the proposed battery material refinery.
Yesterday, the Australian government announced over $243m in support for four projects under the initiative, which will create over 3,400 jobs over time and cement Australia’s place in the rapidly growing critical minerals, electric vehicle and battery markets.
There are several potential benefits to Poseidon including maximising margins on concentrates supplied to the refinery and potentially being able to treat a broader range of nickel concentrate specifications, which could unlock significant additional value from the company’s large nickel sulphide resource base proximal to Kalgoorlie.
Recent preliminary leach testwork by PBT demonstrated that Black Swan concentrates could be suitable feed material for the proposed refinery.
The leaching testwork achieved >90% extraction of nickel and >95% extraction of cobalt.
Poseidon is anticipating a final investment decision on the refurbishment of the 1.1-million-tonne-per-annum capacity processing circuit at Black Swan and recommencing mining around mid-year, with first concentrate production targeted for the end of the March quarter 2023.
PBT commercialised and patented the Selective Acid Leaching (SAL) process, which has been commercially proven to produce high-quality, more affordable nickel and cobalt battery materials with a lower environmental footprint.
The technology can also be used to recycle existing lithium-ion battery materials.
PBT managing director and CEO Bjorn Zikarsky said he was excited PBT’s home grown technology was being supported by the Australian government.
“We have developed our technologies from the ground up, working with Australian Universities and research institutions to ensure we produce the cleanest battery materials on the market,” he explained.
“We look forward to delivering the value from these efforts to the emerging Australian battery materials sector.”
PBT chairman Stephen Wilmot noted the value of the investment from the Australian government and its importance in future proofing Australia’s emerging battery industry.
“This federal grant from the Modern Manufacturing Initiative will accelerate the growth of the battery materials industry in Australia.
“We thank the government for their significant support, and look forward to delivering this exciting new project.”
This article was developed in collaboration with Poseidon Nickel, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.