Jervois Global Limited announced the suspension of final construction and full concentrator commissioning at its Idaho Cobalt Operations (ICO) mine.
According to Jervois, the decision came following the continued low cobalt prices and U.S. inflationary impacts on construction costs.
Jervois said ICO’s mineral resource and reserve is the largest and highest grade proven cobalt orebody in the U.S. Jervois stated that it will be the country’s sole primary cobalt mine supply when fully operational. The U.S. Government has declared cobalt a critical mineral.
Jervois assessed that not mining ICO cobalt at cyclically low prices will protect the ICO’s optionality and underlying strategic value for owners and essential stakeholders such as local communities and the State of Idaho. The company also believes that not mining ICO at current rates aligns with U.S. Government’s main mineral policy goals.
Jervois remains optimistic about cobalt’s medium and long-term prospects and expects higher prices due to rising demand from EVs and Western consumers’ preference for Western ESG credentials.
The U.S. Department of Defense (DOD) has informed Jervois that it intends to award an immediate requirement for Defense Production Act (DPA) Title III funds of US$15 million under a Not to Exceed Technology Investment Agreement. According to Jervois, the DOD award would be contingent on satisfactorily completing the appropriately documented stages, including an agreement to the award’s terms and conditions.
Jervois filed for DOD award funds to expedite drilling targeted at boosting the ICO mineral resource and reserve and studies to investigate the feasibility of building a cobalt refinery in the United States; both can proceed notwithstanding ICO’s suspension.
Jervois sees the DOD’s award as an indication of the importance of securing its cobalt supply chain. Jervois anticipates that Western consumers will increasingly prefer cobalt from sources with Western ESG credentials as the company works with the U.S. Department of Energy and EXIM on additional financing efforts.
According to Jervois, ICO remains an essential component of its strategy of acquiring and operating geopolitically strategic mining and crucial mineral processing facilities critical to the energy transition and military industries.
Jervois will demobilise construction contractors from the ICO site, putting employee and contractor safety first while upholding Jervois’ high environmental and regulatory compliance requirements. Jervois will relocate local ICO personnel to tasks supported by the DOD award, reducing the total workforce from 280 to under 30.
As outlined in an earlier announcement, Jervois added that it had completed the mine component of ICO, but the current U.S. inflationary construction and cost environment has made it challenging to manage effectively.
