Jervois Mining acquires nickel, cobalt refinery in Brazil

Australian resource group Jervois Mining has agreed to acquire100% of the São Miguel Paulista (SMP) refinery in São Paulo, Brazil for US$22.5M from Companhia Brasileira de Alumínio’s (CBA), a subsidiary of Votorantim, one of the largest industrial and financial companies in Latin America.

The refinery has an annual capacity of 25ktpy nickel and 2ktpy cobalt and is currently on care and maintenance.

Jervois Mining will begin a feasibility study in Q4 2020 targeting a re-start of the refinery in line with first concentrate from Jervois’s Idaho Cobalt Operations (ICO) in the USA.

The refinery was closed in 2016 during a period of low prices (the LME nickel cash price averaged US$8,496/t in Q1 2016 compared to around US$14,400/t currently, while the benchmark cobalt price stood at US$10.7/lb compared to US$15.4/lb currently).

According to Roskill, Jervois Mining’s acquisition is focussed mainly on cobalt production, with three scenarios put forward for the refinery:

• Produce 2ktpy of refined cobalt using ICO concentrate
• Produce 8ktpy of refined cobalt using ICO concentrate and cobalt hydroxide
• Produce 2.3ktpy of cobalt and 10ktpy of refined nickel using ICO concentrate and mixed hydroxide product (MHP)

The refinery used to produce Class I nickel cathode when last operating, using a combination of its own feed and imported MHP.

Jervois is also developing the Nico Young project in Australia, which would heap leach laterite ore to produce nickel sulphate and cobalt sulphide, although the company also investigated the possibility of only producing MHP.

If Jervois were to produce only MHP at Nico Young and use that as feed for the SMP refinery, the company estimates that it would save A$200m (US$142.4m) in capital costs.

With the strong outlook for lithium-ion batteries used in electric vehicles, due to increasingly nickel-rich cathode chemistries, Roskill expects sharp increases in demand for nickel sulphate. Although CBA did undertake a scoping study to investigate the conversion of the SMP refinery to nickel sulphate production, Jervois has not included this conversion into its current development plans.

The São Miguel Paulista Refinery is one of few refineries globally with the capacity to produce broken cobalt cathode.

CTT in Morocco is now the only producer of broken cathode globally with Chambishi’s recent closure.

Broken cathode is used widely in alloys and tool materials, and it is also a suitable feed choice for catalytic applications, benefiting from its excellent solubility in acid due to its larger surface area compared with other metal forms of cobalt.