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Robert Biancardi has high hopes for new float Cobalt Blue. Louie Douvis
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by Angela Macdonald-Smith
A world away from the scandal-hit mining industry of the Democratic Republic of Congo stands the Thackaringa project in NSW's mining heartland of Broken Hill, said to host one of the world's largest undeveloped cobalt reserves.
"The larger companies will look to ethically source their cobalt," says Joe Kaderavek, chief executive of Cobalt Blue and a former Deutsche Bank head of resources.
"We could well find the supply/demand tensions could get worse," he said of the market already growing at about 8 per cent a year.
In a sector where 98 per cent of cobalt is co-produced with nickel and copper, Cobalt Blue counts itself among the rare breed of pure-play companies, which are potentially attractive for investors looking to tap into the hot commodities with leverage to the expected boom in electric vehicles. Cobalt is an essential ingredient of lithium-ion batteries and of superalloys that are increasingly used in aircraft.
Early stage
A spin-off from Broken Hill Prospecting that is understood to have raised its IPO maximum of $10 million, Cobalt Blue is due to start trading on the ASX on January 31 following a delay after the ASX demanded an upgraded resource assessment. That has been provided in a replacement prospectus lodged with the Australian Securities and Investments Commission. The shares were sold at 20¢ apiece.
The Thackaringa project hosts an inferred resource of 33.1 million tonnes at 833 parts per million of cobalt, and an exploration target of 40 million-66 million tonnes at 600-900 ppm. Its location on the outskirts of Broken Hill ensures access to skilled mine workers, electricity and water supplies and close access to a railway that would take product 400km to Port Pirie in South Australia for eventual export.
The venture is, however, at an early stage, with management aiming to have a bankable feasibility study for the project and all approvals in place by July 2019. Two years of engineering, development and construction would follow.
Chairman Rob Biancardi has carefully been forging relations with potential end customers, including Tesla, which hosted the launch of Cobalt Blue's IPO at its sleek showroom in Sydney's Martin Place.
The IPO also has received an unusual endorsement from NSW mining minister Anthony Roberts and has been strongly endorsed by local government and the state opposition, noted Mr Biancardi, who has held senior roles at IBM, Citibank and Westpac and has board experience in the healthcare and services sector.
