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An ore supply agreement for a proposed $415 million Townsville battery chemicals plant has been extended from five to 10 years.

Proponent Queensland Pacific Metals says greater certainty around long-term supply of ore improves the prospects of securing funding for the Townsville Energy Chemicals Hub (TECH) project).

Meanwhile the company says there has been a slight dealy in the completion of the project pre-feasibility study, which had been expected this month.

Lead engineering consultant Lycopodium is working on the study with QPM, and a range of quotes have been requested for equipment required to build the plant.

QPM said this had taken longer than expected, pushing out the pre-feasibility study’s completion. It is expected to be delivered by the end of the year.

The ore supply deal extension comes at a time when the value of the commodity is on the rise and Indonesia has flagged plans to bring forward a ban on nickel ore exports to 2020 (rather than 2022).

The planned Townsville plant would take high-grade nickel-cobalt lateritic ore from New Caledonia through supply partners Societe des Mines de la Tontouta and Societe Miniere Georges Montagnat.

In addition to extending the supply arrangement to 10 years, a further five years of supply will be available by agreement.

Townsville battery project secures 10-year ore supply
Managing director John Downie.

“The value of this ore supply agreement should not be underestimated in light of the potential Indonesian bans,” managing director John Downie said.

“The high nickel and cobalt grades associated with the New Caledonia ore provides the TECH project with a strong competitive advantage against other projects contemplating the processing of significantly lower grade ore.

“We look forward to delivering the pre-feasibility study and continuing to advance in keeping with our project schedule.”

A site within the Lansdown Industrial Precinct, 40km west of Townsville, has been selected for the TECH plant.