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Australian Mines has kicked off trial mining at its flagship Sconi cobalt-nickel-scandium project in Queensland’s north.

The SCONI scandium–cobalt–nickel tri–metal project is located less than three hours’ drive northwest of Townsville, Queensland. The SCONI project consists of five deposits, Greenvale, Lucknow, Bell Creek, Minnamoolka and Kokomo, with granted mining leases covering all key deposits.

According to the company, Sconi is the most advanced project of its type in Australia and it has a minimum 20-year mine life.

The initial trial mining campaign will involve excavating 20 tonnes of the ore, which is anticipated to produce 160kg of nickel sulphate, 20kg of cobalt sulphate and 5kg of high-grade scandium oxide.

The ore is already promised to several prospective customers as part of ongoing offtake negotiations. Additionally, the company stated it has received a lot of interest from battery and technology manufacturers and will potentially expand its trial mining program to ensure these parties receive ore samples.

A bankable feasibility study is currently underway at Sconi and is due for completion in April 2018.

In early September 2017, Australian Mines agreed to purchase 100% of Sconi from Metallica Minerals (ASX: MLM) for $10 million in cash and shares. Australian Mines has already made an initial $3.5 million payment.

Once operational, a prefeasibility study revealed Sconi could have annual production of: 3,010 tonnes of cobalt sulphate, 24,420 tonnes of nickel sulphate, and 77 tonnes of scandium oxide.

On the 10th of October 2016, Metallica announced that the Company had entered into a Farm–in and JV Agreement with Australian Mines Ltd (Australian Mines) (ASX:AUZ) over Metallica’s 100% owned SCONI project.

Scandium oxide and cobalt are used in emerging battery technologies and are predicted to experience soaring demand as the world moves towards more sustainable and cleaner energy.

One of scandium’s commercial uses is in alloy form with aluminium. The resulting metal remains light but is stronger, more heat tolerant, and corrosion resistant. The aircraft industry has shown a strong interest in this alloy.

In the electric field, scandium stabilises heat while generating higher power, which can increase performance and life.

Cobalt sulphate has several uses including battery storage (electric vehicles), super alloys, drying agent in paint and inks, colouring, and a vitamin B12 supplement.