Cobalt Blue (ASX:COB) is targeting a definitive offtake agreement with Swiss trader STG Metals after signing a non-binding term sheet for cobalt metal from its proposed Kwinana Cobalt Refinery (KCR) in Western Australia.
The term sheet covers standard grade cobalt metal rounds, with a cobalt content above 99.8%, from the KCR project.
The proposed offtake contributes substantially towards the company’s share of KCR’s overall requirement and provides an early sales channel, while cobalt sulphate is qualified for battery markets.
CEO Andrew Tong says the term sheet adds to the commercial framework as Cobalt Blue works towards a final investment decision (FID).
“Offtake is a key pillar of our FID process, and this term sheet with STG is a meaningful addition to Cobalt Blue’s commercial framework,” Tong says.
“Combined with our binding feedstock agreement with Glencore and product qualification work at the Broken Hill Technology Centre, we are continuing to build the commercial foundations required to support a final investment decision.”
Under the terms, Cobalt Blue or its nominee will sell to STG for three years from commercial operation, with a mutual option to extend for a further three years. Volumes run at 500–750 million tonnes per annum (Mtpa) in year one and 800–1000Mtpa in years two and three.
Conditions precedent include the completion of construction and commissioning of KCR, achievement of product qualification thresholds, and approval of the definitive agreement by the Cobalt Blue board. If conditions are not met or waived by 31 December 2028, the parties may agree to extend or terminate.
A confidentiality agreement dated 1 May 2026 remains in place, and Western Australia law governs the agreement.
Kwinana refinery
KCR’s proposed stage one capacity is about 3,000 tonnes per annum of contained cobalt, comprising 1,000 tonnes of cobalt metal and 2,000 tonnes of cobalt in cobalt sulphate.
It will be Australia’s first dedicated mid-stream cobalt refinery, supplying cobalt metal for advanced manufacturing and defence, and cobalt sulphate for the battery supply chain.
The refinery sits in the Kwinana Industrial Zone, 40km south of Perth, on Iwatani Australia’s Doral Fused Materials site.
Cobalt Blue holds a works approval from the WA Department of Water and Environmental Regulation to build and operate the refinery.
Its Broken Hill Technology Centre has produced cobalt metal and cobalt sulphate at pilot scale, with quality confirmed against market specifications.
Cobalt Blue Holdings is a mining and mineral processing company focused on developing critical minerals like copper, cobalt, and silver.
Write to Paula Fabe at Mining.com.au
Main image: Cobalt Blue Holdings
