Cobalt Blue Lines Up Buyer for Up to 1,000 Tonnes of Kwinana Cobalt a Year
Key Takeaways
- Cobalt Blue has signed a non-binding term sheet with STG Metals GmbH for up to 1,000 mt pa of cobalt metal rounds (>99.8% Co) from the proposed Kwinana Cobalt Refinery, for 3 years from Commercial Operation with a 3-year mutual extension option.
- Volumes ramp from 500-750 mt pa in Year 1 to 800-1,000 mt pa in Years 2-3, priced off Fastmarkets MB-CO-0005, so revenue would track the cobalt market rather than a fixed price.
- Only the negotiation conduct provisions are binding, and the deal depends on KCR being built, product qualification thresholds being met and board approval by the 31 December 2028 longstop date.
- The term sheet sits alongside a binding Glencore feedstock agreement (29 May 2025) and a DWER Works Approval (16 September 2025), completing more of the commercial case ahead of FID.
- No FID date, capital cost, funding figures or sale price were disclosed, so the commercial pathway is clearer but the financing question remains open.
Cobalt Blue signs term sheet with STG Metals for Kwinana Cobalt Refinery cobalt metal offtake
A cobalt refinery with no signed buyer is a hard project to finance. Cobalt Blue Holdings (ASX: COB) has now signed a non-binding term sheet with STG Metals GmbH for standard grade cobalt metal rounds (>99.8% Co) from the proposed Kwinana Cobalt Refinery (KCR), announced on 19 October 2026.
The commercial terms are non-binding and remain subject to a definitive Offtake Agreement. However, both parties have entered into binding obligations on the conduct of negotiations and the commitment of resources toward finalising that agreement.
The binding provisions do not oblige either party to enter into the Offtake Agreement unless and until all material terms have been agreed and it has been executed by both parties. In plain terms, both sides are committed to negotiating properly, but neither is locked into a deal yet.
The company says the proposed cobalt offtake provides an early sales channel while cobalt sulphate is qualified for the battery markets. It also advances KCR’s commercial pathway towards a Final Investment Decision (FID).
Key highlights from the announcement:
- Product: standard grade cobalt metal rounds (>99.8% Co)
- Term: 3 years from Commercial Operation, with a mutual option to extend for a further 3 years
- Volume: up to 1,000 mt pa, described as a substantial contribution towards Cobalt Blue’s share of KCR’s overall offtake requirement
- FID pathway: offtake sits alongside secured feedstock, permitting and product qualification activities
Dr Andrew Tong, CEO, Cobalt Blue
“Offtake is a key pillar of our FID process, and this term sheet with STG is a meaningful addition to Cobalt Blue’s commercial framework…”
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Term sheet outlines up to 1,000 mt pa of cobalt metal over three years
The table below summarises the proposed terms. Aside from the binding provisions, all of these commercial terms are subject to negotiation and execution of a definitive Offtake Agreement.
| Term | Detail |
|---|---|
| Seller | Cobalt Blue Holdings Limited (or its nominee) |
| Buyer | STG Metals GmbH |
| Product | Standard grade cobalt metal rounds (>99.8% Co content) |
| Origin | Kwinana Cobalt Refinery, Western Australia |
| Term | **3 years** from Commercial Operation, with a mutual option to extend for a further **3 years** |
| Volume | Year 1: **500–750 mt pa** | Years 2–3: **800–1,000 mt pa** |
| Pricing | Referenced to Fastmarkets MB-CO-0005 (cobalt standard grade, in-whs Rotterdam, US$/lb), converted to USD/mt |
| Longstop date | **31 December 2028** |
| Governing law | Western Australia, Australia |
The term sheet lists three conditions precedent, which are events that must occur before the agreement takes effect:
- Completion of construction and commissioning of KCR.
- Achievement of product qualification thresholds.
- Approval by the board of Cobalt Blue Holdings Limited of the definitive Offtake Agreement.
If the conditions are not satisfied or waived by 31 December 2028, the parties may agree to extend that date or either party may terminate the agreement.
The announcement does not disclose a sale price or revenue figure, nor what share of KCR’s offtake requirement the volume represents. Investors should treat the volumes as proposed ranges rather than committed sales.
Why offtake matters for KCR’s path to FID
Offtake explained for investors
An offtake agreement is a contract in which a buyer agrees to purchase a project’s future production. A term sheet is the earlier step: it sets out the main proposed terms, but a definitive agreement is the document that legally finalises them.
Pricing referenced to a benchmark such as Fastmarkets MB-CO-0005 means the sale price would follow a published market reference rather than a fixed figure. For you as an investor, a signed term sheet with a named buyer is a tangible step, though the non-binding commercial terms mean it is not yet a guaranteed revenue stream.
Building the commercial foundations
The STG term sheet adds to existing groundwork. Cobalt Blue has a binding feedstock supply agreement with Glencore (ASX announcement dated 29 May 2025), and a Works Approval from the Western Australian Department of Water and Environmental Regulation (DWER) to construct and operate KCR (announced 16 September 2025).
Product qualification work is also under way at the Broken Hill Technology Centre (BHTC). The BHTC has produced both cobalt metal and cobalt sulphate at pilot scale, with product quality confirmed against market specifications.
CEO Dr Andrew Tong linked these pieces together, saying the company is “…continuing to build the commercial foundations required to support a Final Investment Decision…”
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About KCR and STG Metals
KCR’s proposed Stage 1 production capacity is approximately 3,000 tonnes per annum of contained cobalt. That comprises approximately 1,000 tonnes of cobalt metal and 2,000 tonnes of cobalt contained in cobalt sulphate.
The refinery is proposed for the Kwinana Industrial Zone, approximately 40 km south of Perth, on the site of Iwatani Australia’s Doral Fused Materials (DFM) facility. That brownfield site has existing infrastructure and services, and is in direct proximity to Fremantle Port.
The project aims to supply refined cobalt metal for advanced manufacturing and defence applications, and cobalt sulphate for the battery supply chain. The company states it will be the first dedicated mid-stream cobalt refinery in Australia.
The announcement describes STG as follows:
- Trading business funded by the partners of Squarepoint Capital, a global quantitative investment firm
- Active across Europe, Asia and the Americas
- Described as one of the fastest-growing traders of physical commodities over the past year
- Active in aluminium, cobalt, copper and other base metals
- Registered in Zug, Switzerland
On next steps, Cobalt Blue says it remains focused on finalising the Offtake Agreement and continuing to progress KCR toward a Final Investment Decision. The announcement does not disclose an FID date, capital cost or funding figures.
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