Pure Minerals said it had entered into a memorandum of understanding with LG Chem, which it said was a serious obligation for Asian companies.

The South Korean company is looking to buy of 10,000 tonnes of contained nickel and 1000 tonnes of cobalt from Pure Minerals’ TECH project in Townsville.

While the company would not put a dollar value on the potential offtake, it said it was a significant boost for the project.

Pure wants to build a Townsville Energy Chemical Hub (TECH) project which would include a new refinery processing 600,000 tonnes of laterite ore a year to produce 25,000 tonnes of nickel sulphate and 3,000 tonnes of cobalt sulphate plus other valuable co-products such as hematite and alumina.

As part of the MOU, the two companies would work together to increase the scale of the TECH project to meet the demand from LG Chem.

It said a bigger project would have several benefits including more jobs and more favourable project economics.

The two companies would also negotiate an offtake agreement over a term of three to five years and LG would consider helping in the financing of the project, which could include a prepayment.

Pure chief executive Stephen Grocott said the company’s original intention was to build the smallest commercially-sized project that would be economically viable and fundable.

‘”With LG Chem’s involvement there is now potential to scale up the size of the TECH project to one which offers capital efficiency,” Grocott said.

“We will immediately commence work on this. Once the plant size is finalised we will be able to formally commence a bankable feasibility study and project approvals.”