Cobalt Blue Faces Funding and Supply Challenges Amid DRC Export Ban Extension

Halls Creek Project, A Robust Copper-Zinc-Silver Opportunity

Cobalt Blue Holdings Limited has delivered a significant milestone with the completion of a scoping study for its Halls Creek Project in Western Australia. The study outlines a two-stage mining operation combining open-cut and underground methods, targeting copper, zinc, and silver production over a 10.5-year mine life. With a pre-tax net present value of A$172 million and an internal rate of return of 28%, the project promises strong economic fundamentals supported by a relatively modest start-up capital expenditure of A$73 million.

The first stage focuses on open-pit mining at the Onedin deposit, producing copper metal and zinc sulphate via heap leach processing. The second stage transitions to underground mining at the Sandiego deposit, delivering copper and zinc concentrates alongside significant silver by-products. Operating costs are competitive, with copper production costs estimated at around US$1.11–1.33 per pound net of by-product credits, positioning the project well within industry benchmarks.

Strategic Feedstock and Refinery Development Progress

In parallel with mining development, Cobalt Blue has secured a binding contract with Glencore International AG to supply cobalt hydroxide feedstock for its Kwinana Cobalt Refinery. This agreement guarantees a minimum of 3,750 tonnes annually for three years, covering half of the refinery's initial feedstock needs. The cobalt will be sourced primarily from Glencore’s operations in the Democratic Republic of Congo (DRC), the world’s largest cobalt supplier, despite ongoing export bans that have tightened global supply.

Further advancing the refinery project, Cobalt Blue and Iwatani Australia Pty Limited have executed a pre-Final Investment Decision consortium deed. This binding agreement sets out milestones and conditions, including technical validation, financing arrangements, and regulatory approvals, aiming for a final investment decision by the end of 2025. The partnership underscores a strategic approach to de-risking and financing the refinery, which is central to Cobalt Blue’s critical minerals strategy.

Extended Major Project Status and Operational Adjustments

The company also received a three-year extension of Major Project Status for its Broken Hill Cobalt Project in New South Wales. This status enhances regulatory support and development prospects, complementing the company’s broader portfolio. Meanwhile, operational reviews have led to leadership changes, with Dr Andrew Tong stepping in as CEO and former CEO Joe Kaderavek transitioning to Deputy Chairman. Cost-saving initiatives, including staff reductions and salary adjustments, aim to preserve cash flow amid ongoing development expenditures.

Market Context and Financial Position

Cobalt Blue’s progress unfolds against a backdrop of tightening cobalt supply due to extended export bans in the DRC, which have disrupted global markets and elevated prices. Copper continues to enjoy a bull market driven by electrification and infrastructure demand, while zinc and silver markets show resilience and potential upside. Financially, the company reported negative operating cash flow for the quarter but maintains over A$1.2 million in cash and is actively pursuing additional funding options, including capital raising and export credit agency engagement.

Environmental permitting and exploration programs remain priorities as Cobalt Blue prepares for feasibility studies and final investment decisions. The company’s strategic focus on mid-stream processing and critical minerals positions it to capitalize on evolving supply chain dynamics and growing demand for battery and industrial metals.