Jervois Mining to buy cobalt, nickel refinery in Brazil

Jervois Mining (TSXV: JRV; US-OTC: JRVMF) is buying a nickel and cobalt refinery in Brazil from Companhia Brasileira de Alumínio for 125 million reals (US$22.1 million) in an effort to transform the company into a producer and refiner of battery metals.

The miner said the São Miguel Paulista refinery in São Paulo had a production capacity of 25,000 tonnes per year nickel and 2,000 tonnes per year cobalt before it was placed on care and maintenance in 2016.

Once the acquisition is completed, it will launch a feasibility study to restart the refinery, the company said.

Jervois Mining has been on a buying spree to build itself into a supplier of materials outside of China, which dominates the electric vehicle supply chain.

In June 2019, it closed a deal to buy M2 Cobalt Corp., which has operations in Uganda. A month later, it acquired Canada’s eCobalt Solutions, through which it gained ownership of the Idaho cobalt project, one of North America’s proposed cobalt mines.

The Democratic Republic of the Congo (DRC) produces about 70% of the world’s cobalt, but purchasers of the metal — mainly electric car makers and battery producers — have become concerned by reports of unethical practices in the country.

Child labour is particularly widespread at informal, artisanal mines, where cobalt is often dug by hand.

The situation has boosted the search for deposits of the metal in other jurisdictions that are considered safer. It has also motivated the creation of global initiatives to monitor and improve artisanal cobalt mines in the DRC.

Jervois also unveiled the results of a bankable feasibility study on its Idaho project and confirmed its potential to become a low-cost cobalt-copper-gold mine.

The study found “significant” opportunities to increase the mineral resource and extend the mine’s reserves once mining starts.

Based on a processing rate of 1,200 tonnes per day, the project could produce 1,915 tonnes cobalt, 2,900 tonnes copper and 6,700 oz. gold annually, over a mine life of seven years.

The Idaho project is estimated to require a capital investment of US$78.4 million and will have an operating cost of US$7.45 per lb. payable cobalt.

Jervois believes the imminent acquisition of the Sao Miguel Paulista nickel and cobalt refinery, together with existing offtake negotiations, would give it much-needed flexibility to convert Idaho concentrates into refined products destined mainly for the U.S. market.

— This article first appeared in MINING.com, part of Glacier Resource Innovation Group.