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Peak-performing Terrafame mine starts construction of battery chemicals plant

Building has begun on a new nickel and cobalt sulphate refining plant in Sotkamo that is expected to bring 150 new jobs and 200 million euros in added turnover.

Finland may soon be a major supplier of nickel and cobalt for electric motors. Image: YLE

The Terrafame mining company announced on Thursday that it would begin foundation work on a battery chemicals plant. Located in the north-eastern Finland town of Sotkamo, Terrafame says the plant will expand the multi-metal mine's operations and bring increased profitability.

The plant will improve the refining capabilities of the mine, as there is a growing market for materials used in the manufacture of electric and hybrid motor batteries (EVBs). Specifically, it will further process Terrafame’s current main product of nickel-cobalt sulphide into nickel sulphate and cobalt sulphate, both of which are used in lithium-ion batteries.

200m in added turnover projected

Terrafame reports that a significant share of their nickel and cobalt sulphate production is already being allocated to manufacturing EVB chemicals, so building their own refining plant would bring them "closer to end users".

The mining company will apply for an environmental permit for the battery chemicals plant early next year. The mine reports that it has already entered into major technology agreements with the key equipment suppliers. The Sweco engineering company, headquartered in Stockholm, has been commissioned to lead the design and build.

If all goes according to plan, construction will be completed by the end of 2020, and commercial production would begin in early 2021.

"The new plant will increase the mine's turnover by about 200 million euros a year. The construction and launch of battery chemical plants in the region of Kainuu and other areas of Finland will bring significant positive financial results," says Terrafame's CEO Joni Lukkaroinen.

Only European country mining cobalt

Recent calls to impose even stronger measures in the face of global warming will likely mean more legislation in Europe to promote electric and hybrid vehicles. Matti Hietanen, CEO of the Finnish Minerals Group, says that there will also be a push to source as many of the materials required for the batteries from European suppliers.

"This presents great opportunities for Sotkamo and Terrafame. An electric car utilizing the latest technology has a battery that needs over 50 kilograms of nickel, almost 10 kilograms of lithium, and 6.5 kilograms of cobalt," he says.

Finnish Minerals group (formerly Terrafame Group Ltd) is the state-owned parent company of Terrafame, and it has contributed 30 million euros to the project by allocating un-utilised money from a 2017 commitment to invest 50 million euros in the mining outfit. The investment companies of Trafigura and Galena Fund have also committed equity towards the plant.

Hietanen says that Finland is currently the only country in Europe with cobalt mining operations.

"Finland will be the first European country with lithium mining production. We are already Europe's largest producer of nickel, so there is enormous potential there," he says.

Production improving by heaps and bounds

The Terrafame mine has a yearly production capacity of 170,000 tons of nickel sulphide and 7,400 tons of cobalt sulphite.

From June to September of this year, the mine reported an operating profit of 4.7 million euros after having extracted 7,326 tons of nickel and 16,530 tons of zinc from the mine in just three months. The mining company's CEO says operations are now exceeding targets many times over.

"Production levels are now at the level that was originally planned for 2015, under the previous operator [Talvivaara]," Lukkaroinen reports.

Third-quarter net sales at Terrafame totalled 86 million euros, exceeding the net sales figures for the full year of 2017 in just one quarter.