What has happened?
Trafigura, one of the largest physical commodities trading groups in the world, has signed a non-binding Letter of Interest (“LOI”) to potentially supply certain quantities of nickel and cobalt products to Blackstone. The potential of this arrangement is congruent with Blackstone’s strategy of upscaling its downstream refining business and its vision to become a significant global supplier of downstream Nickel products for use in the Lithium-ion battery industry.
What are the key highlights?
- A Non-binding Letter of Interest has been signed by Trafigura to potentially supply specific quantities of Cobalt and Nickel products to Blackstone, which will then be used in the production of downstream products for the booming Lithium-ion battery industry at the Ta Khoa Nickel project in Vietnam by Blackstone.
- This may prove significant as Trafigura is one of the largest physical commodities trading groups in the world and is one of the leading physical commodities traders involved in Copper, Zinc, Lead, Nickel and Cobalt Trading. Trafigura sources, stores, transports and delivers a range of raw materials to clients globally and has recently established a power and renewables trading division.
- The scoping study conducted by Blackstone is also considering the potential construction of a downstream refinery that could have the capacity to process up to 200ktpa of concentrate, which in turn will be sources entirely from the mining operation at Blackstone’s Ta Khoa Nickel-Cu-PGE project.
- Blackstone also intends to upscale its downstream refining business, which they intend to accomplish through the staged construction of additional refining capacity. The intended arrangement stipulated in the non-binding LOI reflects Blackstone’s expectation that additional refining capacity will be met by materials sourced from third parties such as Trafigura.
- The downstream strategy adopted by Blackstone is in response to recent correspondence with major players in the Lithium-ion battery industry which continue to focus on the rapidly increasing demand for downstream nickel products. The Company will also continue to engage with parties interested in Blackstone’s downstream products, which includes ongoing discussions with multiple potential joint venture partners regarding offtake financing and or other funding options available.
- Studies and permitting by Blackstone for the downstream business will commence in parallel with the completion of a Definitive Feasibility Study (“DFS”), a pilot and demonstration plant that will be commissioned in country. This pilot and demonstration plant will in turn be used to advance downstream process flowsheets which are focused on producing Nickel-Cobalt-Manganese (“NCM”) precursor products.
What does this mean?
The recent signing of the non-binding LOI with Trafigura could see the advancement of Blackstone’s strategy to upscale its downstream refining capacity by material sourced from third parties. This all forms part of Blackstone’s vision of becoming a significant supplier of downstream nickel products for the flourishing Lithium-ion battery industry.
Blackstone’s agile strategy in response to recent discussions with major figures in the Lithium-ion battery industry will hopefully assist the Company in capturing the rapidly increasing demand for downstream nickel products.
Additionally, commencement of studies and permitting for the downstream business in tandem with the completion of a DFS, pilot and demonstration plant could be utilized in the advancement of the downstream processing sheets which are focused on producing NCM precursor products. These Nickel-Cobalt-Manganese precursor products have a range of uses, especially in the booming electric vehicle market.
