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RNC Minerals in talks to fund battery material mine

Metal News - Published on Tue, 16 Jan 2018

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REUTERS reported that RNC Minerals is in talks with commodity traders, mine operators and financiers to help secure USD 1 billion to build the world's biggest nickel and cobalt project next year.

A global battery boom, driven by growing demand for electric cars, is pushing prices higher for such key ingredients as nickel and cobalt and encouraging miners to accelerate development plans.

Conditions are right to build Dumont in the Canadian province of Quebec, said RNC. With 3.15 million tonnes of nickel sulphide and 126,000 tonnes of cobalt, it is the largest undeveloped reserve of both metals in the world, the Toronto-based company said on Monday, citing S&P Global Market Intelligence data.

RNC, which changed its name from Royal Nickel in 2016, is in talks with large Japanese trading houses, companies that offer "streaming" deals and miners interested in off-take arrangements to feed their smelters, said Chief Executive Mark Selby in an interview.

Streaming deals offer miners upfront cash in exchange for future production at a discounted, fixed price.

Mr Selby said that "We have a clear path to secure financial backing.”

Lithium batteries, which contain cobalt and high-grade nickel, power electric vehicles for automakers ranging from Tesla to General Motors.

UBS estimates 15 million electric vehicles will be on the road by 2025, lifting nickel demand by 300,000-900,000 tonnes, or by some 10 to 40% of the current market.

Analysts at CRU Group forecast the battery sector will need more than 75,000 tonnes of cobalt a year by 2025, up from around 41,000 tonnes in 2016.

In the past six months, nickel prices have climbed 38% and cobalt 27%.

Mr Selby said that RNC is not yet in direct talks with battery makers or car companies, but is open to those discussions.

The company is also seeking debt financing to fund half the development cost, he said, and expects to complete financing deals late this year and start the two-year construction project in 2019.

RNC owns 50% of Dumont with private equity firm Waterton Global Resource Management holding the remainder.

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Posted By : Rabi Wangkhem on Tue, 16 Jan 2018
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