RNC Minerals in talks to fund $1B Quebec nickel, cobalt mine to supply EV battery minerals

Mines survey Photo courtesy RNC Minerals.

RNC Minerals looking to build Dumont mine near Amos, QC

Canadian mining company RNC Minerals is planning to build the world’s largest nickel and cobalt project next year. The company is currently lining up commodity traders, mine operators and financiers to secure $1 billion to fund the Dumont Nickel Project.

RNC Minerals is looking to cash in on the growing demand for nickel and cobalt prices as electric vehicles become more popular.

According to UBS estimates, there will be 15 million EVs on the road by 2025.  As a result, demand for nickel will rise between 300,000 to 900,000 tonnes, or 10-40 per cent or the current market.  Canadian-based BMO is forecasting growth of nickel demand to be about 10 per cent of current market size by 2025.

CRU Group analysts predict demand for cobalt will rise from 41,000 tonnes in 2016 to over 75,000 tonnes annually by 2025.

Nickel prices have risen 38 per cent and cobalt prices are up 27 per cent in the past six months.

According to the RNC Minerals’ website, the Dumont project will be built in “the established Abitibi mining camp in the mining-friendly Canadian province of Québec.”  The project is located near the town of Amos, located in northwestern Quebec.

The Toronto-based company says the mines holds 3.15 million tonnes of nickel sulphide and 126,000 tonnes of cobalt, making it the largest undeveloped reserve of both metals in the world.

RNC Chief Executive Mark Selby told Reuters that the company is in talks with large Japanese trading houses as well as financing companies that offer cash up front for exchange for future production at a discounted price and miners interested in off-take arrangements to feed their smelters.

“We have a clear path to secure financial backing,” Selby said.

Selby adds that the company is not in direct talks with battery companies or automakers, but is open to those discussions.

According to Selby, RNC is also seeking debt financing to fund half the cost of development.  He told Reuters he expects financing deals late this year with construction beginning in 2019.  The mine should take two years to build.

Currently, most of the world’s cobalt supply comes from the Democratic Republic of Congo.  In 2016, miner Glencore produced over 28,000 tonnes of cobalt, and sold 20,000 tonnes to a Chinese battery maker.

Photo courtesy RNC Minerals.



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