Chilean Cobalt Corp. has secured an offtake agreement with mining giant Glencore for the entire output of its La Cobaltera project in northern Chile.

Located in the San Juan District, the mine was operated between the mid-1800s and 1944 and its reserves were never depleted. 

Under a non-binding letter of intent, Chilean Cobalt will supply all cobalt and copper intermediate products from La Cobaltera for an initial period of five years.

Phase 1 of its development focuses on its near-term production potential from cobalt-copper and copper oxide resources, using historical open pit development. The second phase will be dedicated to the deeper sulphide mineralisation, which contains copper and cobalt with evidence of gold. Details on potential volumes remain unknown.

The offtake sales price will be based on a mutually agreed pricing formula linked to future prevailing market prices which was not disclosed, Kallanish understands.

Glencore will provide strategic support for the first phase of the project and collaboration on greenfield solutions for domestic US processing and refining into battery materials or metal products.

Most of the feedstock is expected to be shipped to the US and to countries with which it has free trade agreements, the miners say.

Chilean Cobalt adds this is in line with ongoing discussions with “certain third parties” regarding its “strategy to establish an Americas-centric cobalt supply chain.” The company, based in the US state of Pennsylvania, expects to leverage Glencore’s capabilities and global network as part of the offtake agreement.

Glencore is a cobalt giant, with extraction and processing operations in the Democratic Republic of the Congo, Australia, Canada, and Norway, and it is growing its cobalt recycling presence.