Brazilian mining company Vale has made two separate deals to sell 75% of its cobalt production from the Voisey's Bay mine in Canada for a total of $690m to Wheaton Precious Metals and Cobalt 27 Capital.
The offtakes from the Canadian cobalt mine and concentrator, located on the north coast of Labrador, will begin from 1 January, 2021.
Vancouver-based Wheaton has agreed to pay an upfront amount $390m to receive an amount of cobalt equal to 42.4% of the Voisey’s Bay mine cobalt production. The deal will be in place until the delivery of 31 million pounds of cobalt and following that, Wheaton will receive 21.2% of cobalt production through the life of mine.
Wheaton president and CEO Randy Smallwood said: “While our focus has been, and always will be on precious metal streaming, we welcomed the opportunity to invest in another low-cost, long-life asset with a partner of Vale’s calibre.
“Wheaton has built a portfolio of streams on high-quality mines, and Voisey’s Bay has both the quality and the scale to make it an accretive addition to this portfolio.”
On the other hand, the Toronto-based Cobalt 27 has agreed to buy an amount of finished cobalt equal to 32.6% of the cobalt production from the Canadian mine which also includes the output from the proposed Voisey’s Bay Mine Expansion. For this, Cobalt 27 will pay Vale an upfront amount of $300m.
Cobalt 27 chairman and CEO Anthony Milewski said: “Following our recent investment in Ramu, this transaction builds on our commitment to add high quality streams and royalties and represents a strong step forward in diversifying our portfolio with the Voisey’s Bay mine, a world-class, low-cost and long-life nickel/copper/cobalt asset located in a low political-risk jurisdiction.
“Further, Voisey’s Bay has significant infrastructure including a state-of-the-art nickel/copper/cobalt refinery to support the planned VBME.”
Located in Newfoundland & Labrador, the Voisey’s Bay mine has been in production from 2005. The project site features an open pit mine, concentrator, tailings facility and diesel power generation facility among others.
Vale has also revealed its plans to move ahead with the construction of the VBME, which is enter into full production in 2021. The $1.7bn mine expansion project is anticipated to prolong Voisey’s Bay’s mine life to 2034.