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Critical minerals spin-out eyes Korea boom

Rod Corps and his team want to dig the future out of the ground, just as Australia’s allies are looking to secure supplies of critical minerals.

The managing director of NiCo Resources is spruiking one of the world’s largest undeveloped nickel-cobalt deposits on the back of a potential super-boom to fuel the global clean energy revolution.

The spin-out from explorer Metals-X is seeking fresh cash to unlock the Central Musgrave Project (CMP) tenements, which includes Wingellina in Western Australia and Claude Hill and Mt Davies in South Australia.

The Wingellina nickel-cobalt project alone is one of the world’s largest undeveloped deposits and is “development ready” after having $60 million spent on it in the past decade, Mr Corps told AAP.

He is in the last week of a share sale before NiCo lists on the Australian stock exchange in the new year.

“The timing is fortuitous but it was always going to happen this way,” Mr Corps said.

“It lets this asset breathe and run its own race.”

With former managing director of Metals-X Warren Hallam as chair and Max Maczurad as head geologist, the NiCo leadership team is already wooing past partners.

Ten years ago, there was an MOU signed between Metals-X and South Korean multinationals Posco and Samsung.

Metals-X also signed a landmark agreement with Traditional Owners and Native Title holders that secured consent for mining activities in exchange for a share of the royalties, which still stands.

But then the nickel price collapsed, and so did the business case.

Now, the whole project is getting a re-boot as South Korea looks for an alternative to China’s dominance of supply chains for critical minerals.

South Korea has pledged to become a global battery manufacturing powerhouse by 2030, as part of its plan to be carbon neutral by 2050.

Australia supplies around 40 per cent of South Korea’s critical mineral imports, which are crucial for many of the components needed to drive the world’s economies to net zero emissions by 2050.

The two countries signed a “low and zero emissions technology partnership” six weeks ago and on Monday signed an MOU on cooperation in the critical mineral supply chain.

“Australia, the world’s richest country in mineral resources and Korea a major producer of batteries and electric vehicles play an important role in the global supply chain,” President Moon Jae-in said in Canberra.

“Our two countries share the view that establishing a stable mineral supply chain is important not only for the two countries, but also for the global economy.”

“We will systematically cooperate throughout the entire resource development cycle including mineral exploration, development, production and mining disaster management.”

Lithium firm Pilbara Minerals chief executive Ken Brinsden believes South Korea is an important next mover behind China, as an alternative to China’s dominance of supply chains for critical minerals.

He finalised a deal in October with steel giant Posco for a lithium processing plant in South Korea.

South Korea has already overtaken the United States and China in fuel cell EVs, contributing half of the world’s production, according to research by the Australia-Korea Business Council.

The North Asia powerhouse is also banking on the future hydrogen economy, as majors such as Hyundai build new plants to chase global dominance in fuel cell electric vehicles (FCEVs) and tap into construction machinery and logistics equipment.

“This is an area where Australia and Korea is already working very closely together to build those reliable trusted supply chains in these critical minerals and rare earths that we know will power the new energy economy and the global economy into then future,” Prime Minister Scott Morrison said.

The business council says hundreds of millions of dollars worth of deals are on the table between Australian critical minerals companies and South Korean manufacturers who want raw materials.

“The key is to re-enter discussions, which we have been doing, with the people that were interested before – Posco, obviously being one of them,” Mr Corps said.

“They’re well aware of this project, as are the majors.”

Market watchers are expecting strong nickel prices for the next 5-10 years.

“With the rise of the electric vehicle market and the shortness and tightness of supply, these projects come into focus,” Mr Corps said.

“Now nickel is back to around $20,000 and the cobalt price has picked up as well.”

Asked whether NiCo could be bigger than Metals-X one day, he said it was a possibility.

“There’s obviously a big capital spend on infrastructure and plant set up but once that’s done the pay back period is about four years,” he said.

“You’ve got a reserve in there of basically 39 to 40 years of 40,000 tonnes, and 20,000 tonnes of cobalt.”

“You’re talking about $1 billion in revenue, per annum.”

Travis Clark, managing director at Marketech, manager of the float, said interest wasn’t a problem

“The thing with NiCo is there’s a huge amount of institutional interest,” he said.

“You need spread, you need a certain number of shareholders.”

To list on ASX, the company must meet minimum admission criteria, including a minimum of 300 investors chipping in $2,000 each and a free float of 20 per cent.

“You need feet on the street when you actually list,” he said.

“One of the interesting things about it is that we’re raising 10 to 12 million dollars and then Metals-X who are getting an in specie transfer for their shareholders have turned around and said we’ll take several million of that.”

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