The Morrison government has granted “major project status” to a $560 million cobalt mine near Broken Hill that would boost Australia’s role in global lithium-ion battery supply chains dominated by China, Russia and Congo.
Cobalt Blue Holdings will produce 16,700 tonnes per year of cobalt sulphate, a key battery making ingredient, and support 450 construction jobs for the first two years and 410 jobs during production over the next 17 years.
The special status, to be announced on Wednesday, does not involve any government funds or guarantees but means the bureaucracy has been put on alert to treat the project as strategically significant, with a view to speeding up approvals and red tape.
Demand for cobalt is forecast to surge dramatically in the coming years as the world’s automakers switch to electric vehicles and hybrids, but concerns about sourcing are driving the push for new mines.
China is the world’s biggest producer of refined cobalt, with much of its raw material coming from Congo, home to more than 70 per cent of global supply, according to US Geological Survey data released in January.
Australia produced 5600 tonnes in 2021, ranking it third behind the Democratic Republic of Congo’s 120,000 tonnes and Russia’s 7600 tonnes.
Another 1.4 million tonnes of reserves have been identified in Australia, second only to Congo, with 3.5 million tonnes, USGS says.
Industry Minister Angus Taylor said the project would further cement Australia’s role as a key participant in the market.
“This mine will not only help the surrounding regional communities in and around Broken Hill, it will also help power the growing battery industry and reduce emissions,” Mr Taylor said.
The declaration hands the job of handling Australian government approvals to the industry department’s Major Projects Facilitation Agency.
Cobalt Blue Holdings chief executive officer Joe Kaderavek said the major project status would “greatly assist” the company in raising development capital “by recognising the strategic importance given to this project by the Australian government”.
“This milestone is critically important for overseas partners and well-timed in our development journey.”
Cobalt Blue was invited to a meeting in December with South Korean President Moon Jae In and has a partnership with South Korea’s LX International.
The ASX-listed company was founded in 2016 and aims to become the world’s biggest supplier of “ethical” cobalt from a mine 25 kilometres outside Broken Hill in western NSW.