February 19, 2018 / 6:19 AM / 3 months ago

UPDATE 1-Australian Mines signs off-take deal with Korea's SK Innovation

(Adds details of deal, background)

Feb 19 (Reuters) - Battery and technology metals developer Australian Mines Ltd said on Monday it signed a deal with Korea’s SK Innovation Co Ltd to supply cobalt sulphate and nickel sulphate from its flagship Sconi project.

The commodity off-take agreement, which is for an initial period of 7 years, is for SK Innovation’s newly developed battery manufacturing plant in Hungary and Korea, the company said.

Australian Mines, which has been on a trading halt since last trading on Feb. 9, said the agreement included an option for SK Innovation to buy up to 19.9 percent of its ordinary shares.

The agreement is conditional on Australian Mines obtaining finance for the Sconi project by the end of 2018, with mining to start by the end of 2020, the company said.

SK Innovation will take all of the nickel and cobalt from the Sconi mine, it added.

Australia, home to the world’s second-biggest cobalt reserves, is seeing a rush of interest in projects still years from production as electric vehicle battery makers seek supplies from a more costly but less risky source than top miner, the Democratic Republic of Congo.

The South Korean battery giant, which owns the country’s top refiner SK Energy, said in November it will invest 840.2 billion won ($777 million) to build an electric vehicle battery plant in Hungary to meet demand from automakers in Europe.

Reporting by Christina Martin in Bengaluru; editing by Richard Pullin

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