Cobalt Blue Opens Kwinana Cobalt Sales Channel With STG Term Sheet

STG Term Sheet Opens Kwinana Sales Channel

Cobalt Blue Holdings Limited (ASX:COB) has taken a meaningful step towards commercialising its proposed Kwinana Cobalt Refinery, signing a term sheet with Swiss metals trader STG Metals GmbH for standard grade cobalt metal rounds exceeding 99.8% cobalt.

The proposed arrangement would give Cobalt Blue an early sales channel for Kwinana’s metal product while cobalt sulphate is still being qualified for battery markets. It adds to Kwinana refinery progress, after recent coverage noted the project had cleared important technical and regulatory hurdles.

Proposed Volumes Rise After Commercial Operation

Under the term sheet, STG would take between 500 and 750 metric tonnes a year in the first year, increasing to 800-1,000 tonnes a year in years two and three. The proposed term runs for three years from commercial operation, with a mutual option to extend for another three years.

Pricing would be referenced to Fastmarkets’ standard grade cobalt benchmark for material in-whs Rotterdam, quoted in US dollars per pound and converted to US dollars per tonne. The announcement does not disclose a fixed price, revenue value or funding commitment.

Offtake Supports Kwinana Final Investment Decision

Kwinana’s proposed Stage 1 capacity is approximately 3,000 tonnes a year of contained cobalt, split between about 1,000 tonnes of cobalt metal and 2,000 tonnes contained in cobalt sulphate. Cobalt Blue says the STG proposal represents a substantial contribution towards its share of the refinery’s overall offtake requirement.

Chief executive Andrew Tong said the term sheet, together with a binding Glencore feedstock agreement and product qualification work at the company’s Broken Hill Technology Centre, was building the commercial foundations for a Final Investment Decision. Kwinana also has a works approval for construction and operation, and the refinery is planned for an existing industrial site near Fremantle Port.

Definitive Agreement Remains the Key Hurdle

The commercial terms are not binding and neither party is obliged to sign the definitive offtake agreement until all material terms are agreed and executed. The parties are, however, bound to conduct negotiations and commit the time, resources and expertise considered reasonably necessary to pursue that agreement.

The proposed arrangement is also conditional on completion and commissioning of Kwinana, the achievement of product qualification thresholds and approval of the definitive agreement by Cobalt Blue’s board. If those conditions have not been satisfied or waived by 31 December 2028, the parties may extend the deadline by agreement or either party may terminate, leaving the next test less about the headline volume than whether the refinery can convert this commercial pathway into a binding contract.