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Halting final construction of its flagship Idaho Cobalt OperationsShares of Australian battery metals company Jervois Global tumbled on Wednesday after the company announced it was halting final construction of its flagship Idaho Cobalt Operations (ICO) project in the US.

The decision was prompted by weak cobalt prices and inflationary pressure on costs, causing the stock to plummet nearly 42 per cent in Sydney.

The company said it expects battery metal prices to recover in the medium term, driven by demand from electric vehicle (EV) manufacturers, energy transition initiatives, and demand from Western countries that value social and environmental credentials.

Jervois expects to complete construction of the entire concentrator at ICO once cobalt prices recover, and also plans to align with refining capacity in the US commissioned by the company and/or third parties.

Halting final construction of its flagship Idaho Cobalt Operations

Cobalt 99.80% – Europe euro/ton

Cobalt is a crucial component of electric vehicle batteries and is on the US government’s list of critical minerals. The Biden administration believes that the widespread adoption of electric vehicles is an essential part of ongoing efforts to combat climate change.

As carmakers prepare to meet ambitious electrification targets, shortages of the materials needed for batteries have become apparent, sparking a global race to secure such supplies.

Last week, the US and Canada announced that companies with critical mineral projects in both countries will be eligible for financial aid from a $250 million fund this spring.

Jervois has requested funding from the US Department of Defence to accelerate drilling to increase ICO mineral resources and reserves and to evaluate the construction of a cobalt refinery in the US.

Halting final construction of its flagship Idaho Cobalt Operations

International Cobalt Prices euro/ton

The company stressed that both projects will proceed despite the suspension of construction of ICO, which is said to be the largest cobalt resource in the US. The project was partially constructed when Jervois bought it in July 2019, with over $120m invested by the previous owners since the discovery of the cobalt deposit.

The operation would involve a grinding plant and a 1,200-tonne per day concentrator to produce separate cobalt and copper concentrates, with a gold by-product. Jervois owns a nickel and cobalt refinery in Brazil and is talking to third parties in countries such as Canada and Australia about converting the mined material.

About 80 per cent of global refining is concentrated in China, but capacity is growing elsewhere, including the giant Finnish refinery in Kokkola, which Jervois bought in 2021.