Blackstone downstream vision piques Trafigura interest

ASX-listed Vietnam base metals player, Blackstone Minerals has taken a significant initial step in its quest to produce downstream nickel, receiving a non-binding letter of interest from global commodity trading giant, Trafigura. Perth-based Blackstone hopes to upscale its proposed downstream refining operation and become a significant global supplier of downstream nickel products for the lithium-ion battery industry.

To that end, the letter of interest, or “LOI” opens the door to a possible agreement for Trafigura to supply certain quantities of nickel and cobalt products to Blackstone towards its potential production of downstream products for the lithium-ion battery industry at its Ta Khoa nickel project about 160 kilometres west of Hanoi in Vietnam.

Trafigura, who reported EBITDA of US$6 billion in the 12 months to the end of September last year, is one of the largest physical commodities trading groups in the world and one of the leading traders in the oil and petroleum sector as well as the copper, zinc, lead, nickel and cobalt space.

Blackstone Minerals Managing Director, Scott Williamson said: “We are delighted to have laid the foundations for our relationship with Trafigura, a globally significant trading company. Blackstone is taking steps to become a significant global, green nickel product supplier catering to the battery market. We believe Vietnam is ideally situated to manufacture green nickel products, given its competitive costs, abundant supply of renewable energy and excellent infrastructure.”

“The economic return on capital invested downstream is underpinned by superior margins achieved by producing downstream products. We are confident we can deliver a robust downstream processing flow sheet, enabling value to be realised from our mining inventory at Ta Khoa … (and) by purchasing and subsequently refining a range of nickel and cobalt materials. The purchase of third-party nickel and cobalt materials not only adds scale to the downstream business, (but) it also adds diversification and reduces risk across the company’s portfolio of assets in Vietnam.”

Blackstone has been running some scoping study numbers over the proposed construction of a downstream refinery with a processing capacity of up to 200,000 tonnes per annum of concentrate, sourced entirely from ore mined at Ta Khoa.

In addition, the company has adopted a strategy involving an upscaling of the downstream refining operation via the staged construction of additional refining capacity. The LOI that Trafigura has signed reflects Blackstone’s expectation that additional downstream refining capacity will be met by materials sourced from third parties.

According to Blackstone, in parallel with the completion of a definitive feasibility study, a pilot plant – intended to be used to demonstrate downstream process flow sheets - focused on producing NCM battery precursor products – will also be commissioned.

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