Kobaloni Energy Zambia is developing a battery-grade cobalt sulphate refinery in Zambia that will convert cobalt hydroxide into a higher-value chemical product for use in cathode manufacturing.
The planned facility is targeting initial production of 6,000 tonnes per year of contained cobalt in cobalt sulphate, with the potential to double capacity in a future expansion. Kobaloni has indicated that the initial production level could provide material for batteries used in approximately one million electric vehicles each year. The project has been recognised as a strategic project under the EU Critical Raw Materials Act and is intended to establish a traceable cobalt supply route for European battery manufacturers.
Refinery designed for cobalt hydroxide feedstock
Rather than exporting lower-value cobalt intermediate material to processing centres in Asia, the project is designed to produce battery-grade cobalt sulphate closer to the source of the feedstock.
Kobaloni’s principal asset is the refinery itself, rather than a dedicated cobalt mine. The facility could process cobalt hydroxide sourced from Zambia and the neighbouring Democratic Republic of Congo, allowing the project to obtain feedstock from multiple mining operations rather than relying on ownership of a single deposit. The development model therefore separates refinery operations from the ownership of an individual mining asset, with cobalt hydroxide serving as the principal feedstock for the chemical conversion process.
Development cost and proposed financing
Published project information has put the estimated development cost at approximately €75 million, while the project has identified a debt requirement of about €55 million. The Africa Finance Corporation has previously expressed interest in providing up to US$100 million. That expression of interest does not constitute committed project financing, with any funding subject to due diligence, definitive documentation and the satisfaction of conditions precedent.
Feedstock and European offtake requirements
The project’s financing and operating requirements include securing long-term cobalt hydroxide supply contracts and establishing the quality characteristics of the feedstock, including impurity levels. Kobaloni also needs to address traceability, recovery guarantees, energy costs and reagent costs as part of the refinery’s development and operating model.
On the sales side, committed offtake from creditworthy European cathode or battery manufacturers is another key requirement. The refinery’s operating performance and commercial exposure will depend on securing both suitable feedstock and qualified customers for its cobalt sulphate output. Without reliable feedstock, refinery capacity could remain underutilised, while a facility with adequate feed but without qualified customers would remain exposed to cobalt-price volatility and working-capital requirements.
