Australian Mines sells seven years of Sconi mine production to SK Innovation

Australian Mines has entered an agreement with South Korean energy and telecommunications giant SK Innovation to sell nickel, cobalt and scandium produced at Queensland’s Sconi mine.

SK, which turns over $122bn overall and $35bn in the field of battery manufacturing, will buy all 12,000 tonnes per annum of nickel and cobalt and 60,000 tonnes per annum of nickel sulphate over the next seven years. The agreement also permits an extension of six years should the two parties wish to do so.

At the same time, SK will purchase up to 19.9% of Australian Mines’ shares – around 669mn at a cost of $0.12 each, totalling roughly $80mn.

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The deal is subject to regulatory and shareholder approval, which also includes SK’s own validation of using Sconi-produced cobalt and nickel.

If the agreement is approved, SK will also help Australian Mines in its bankable feasibility study of the Sconi site. This study is looking at the possibility of trebling annual production volumes, and is due for completion in April.

The money raised from the share sale will be used to fund the development of the mine, specifically its initial construction phase.

Sconi is located around 250km west of Townsville, and is well-situated in terms of logistics links and labour.