A pre-feasibility study has backed the technical and economic merits of a planned $441 million Townsville Energy Chemical Hub.

Pure Minerals this week (December 9) released the results of the study, undertaken by Lycopodium Minerals with the support of consultants.

It is based on an annual production target of 26,398 tonnes of nickel sulphate and 3097 tonnes of cobalt sulphate – key chemicals for battery manufacturing.

Pure Minerals says the study demonstrated the suitability of its preferred DNi Process over the traditional HPAL (high pressure acid leach) method for processing nickel laterite ore.

“The macro fundamentals for the nickel sector are highly encouraging on the back of the continued growth of the electric vehicle market,” managing director John Downie said.

“Future nickel demand must be met by the development of new projects, including those where the primary ore source is laterite.

“Nickel laterite projects have previously faced significant funding hurdles which have prevented project development.

“This has typically been the result of prohibitive capex requirements for plants that have been scaled up significantly in order to make it economic to process low-grade deposits using High Pressure Acid Leach .

“The PFS demonstrates that despite the smaller scale of the TECH project, production levels are significant, project economics are attractive and, most importantly, the capex hurdle is not insurmountable.

“We are enthusiastic at the outcomes of this PFS and will continue to pursue the opportunities we’ve identified to improve the economics and sustainability of the project going forward.”

Major advantages in TECH proposal 

He said a combination of the DNi Process and the high grade of ore supply from New Caledonia were the two biggest advantages and points of difference for the TECH project.

The plant life is expected to be 30 years, with an initial capex of $441 million, plus $72 million in contingency finding, to bring it online.

It is expected to have an annual revenue of $279 million and EBITDA of $124 million per annum.

Pure Minerals subsidiary Queensland Pacific Metals will continue to advance the Townsville project, including commencement of a definitive feasibility study.