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Terrafame to invest €240M in EV battery materials plant; nickel and cobalt sulfates; commercial production in 2021

The Board of Directors of Terraframe—a Finnish multi-metal company producing nickel, zinc, cobalt and copper—has greenlighted the investment of €240 million in a battery materials plant. The plant, which will produce chemicals used in electric vehicle batteries (EVB), will be located at the company’s current industrial site in Sotkamo, Finland.

The estimated production capacity of the new plant is around 170,000 tonnes of nickel sulfate and about 7,400 tonnes of cobalt sulfate per year. As a by-product, the plant would produce ammonium sulfate with a production capacity of 115,000 tonnes per year. Ammonium sulfate is used as fertilizer and in other process industries.

Terraframe has signed a contract with Sweco for the detail engineering design of the battery chemicals plant. Terrafame has also already entered into major technology agreements with key equipment suppliers.

Terrafame has reached the planned target level in the ramp-up of the metals production. During the ramp-up, net sales have also improved, along with profitability. The company’s Board of Directors considers this a good time for making new decisions regarding the future.

—Lauri Ratia, Chairman of the Board of Directors at Terrafame

Production of battery materials is intended to improve the company’s profitability and contribute to the opportunities to invest in continuous improvement of operations.

We have taken the plant project forward with determination since the autumn of 2017, so the investment decision made by the Board is an expected one. Our production technology enables low carbon footprint of nickel and cobalt sulfates needed for electric vehicle batteries. Our goal is to complete the plant by the end of 2020, with commercial production commencing at the start of 2021.

—Joni Lukkaroinen, CEO of Terrafame

The demand for electric vehicles has been growing rapidly, which is reflected in the manufacturing and development of batteries. The size of batteries used in electric and hybrid vehicles grows along with the operational demands of cars, and the share of nickel in li-ion batteries increases.

A significant share of Terrafame’s nickel and cobalt sulfate production is already being allocated to manufacturing electric vehicle battery chemicals, although the further processing into chemicals is currently done outside of Terrafame.

Our own battery chemicals plant takes us further in the value chain and closer to the end users. It allows us to provide a large customer base with high-quality nickel and cobalt sulfates, which are produced in a process optimized for Terrafame’s ore. Simultaneously, Terrafame becomes a significant operator in an industry that advances the reduction of carbon dioxide emissions in transportation.

—Janne Palosaari, Chief Commercial Officer

A financial package of US$200 million on the funding of the plant project, agreed by Finnish Minerals Group (previously Terrafame Group Plc), Galena Asset Management, Trafigura Group and Sampo Plc, was published in November 2017.

In connection with the plant’s final investment decision on 24 October 2018, the parties have agreed on a complementary financing package of approximately €100 million, consisting of an €43-million loan offered by Trafigura and an €60-million equity investment obligation granted by Galena Private Equity Resources Fund and Finnish Minerals Group.

Finnish Minerals Group’s share of the funding will be carried out by reallocating €30 million to the plant project from the €50 million investment commitment granted to Terrafame Plc in February 2017. Finnish Minerals Group’s financial responsibility in Terrafame Plc will not increase due to the new financial arrangement, and no new funding has been required from the State of Finland.

Bioleaching. Terraframe’s current production process is based on mining and ore handling, bioleaching and metals extraction. Ore is first mined at the open pit mine, then crushed, agglomerated, transported and stacked to the bioleaching heaps.

The bioleaching process utilizes microbes to extract metals from ore. Air is blown into stacks of ore and the stacks are irrigated with an acidic production solution. This creates optimal conditions for microbial activity.

Stacked ore is first leached for approximately 15 months at a primary heap. The stack of ore is then reclaimed and conveyed onto a secondary heap for final leaching.

Bioleaching is an energy-efficient way of producing nickel, for example. On the whole, the greenhouse gas emissions of the nickel production process are around 40%, sulfur dioxide emissions 2% and energy consumption 20% lower than average, Terraframe says.

Metals are extracted from the pregnant leach solution (PLS) and precipitated as sulfides in phases at the metals production plant. The final products are filtered and sold for processing.

Terrafame is also planning to start the recovery of natural uranium and its commercial utilization. It submitted an application to the Finnish Government in October 2017 for a permit to recover uranium.

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