Canadian base metals mining company Lundin Mining announced that its joint venture with Freeport-McMoRan, Freeport Cobalt has signed a definitive agreement to sell its cobalt refinery and cobalt cathode precursor businesses to Umicore, a materials technology and recycling group.

Freeport Cobalt’s assets involved in the sale are located in Kokkola, Finland, and Umicore has agreed to acquire the assets for a total consideration of £118m on a debt and cash free basis, along with additional working capital to be taken over at closing, amounting approximately £31m.

Under the transaction agreement, Lundin is entitled to receive 30% of the transaction proceeds and its joint venture Freeport Cobalt would continue to run the fine powders, chemicals, catalyst, ceramics and pigments businesses on the same site.

The transaction is subject to the receipt of required regulatory approvals, and other customary closing conditions along with separation of Freeport Cobalt, and is expected to be closed by the end of 2019.

The acquisition marks an important step in expanding battery materials value chain for Umicore

The company’s R&D, refining, precursor production, cathode materials production and battery recycling operations are located in Europe and is expected to serve the European operations of its battery cell and automotive customers with a fully integrated, sustainable and local battery materials supply chain.

Lundin said that the Kokkola refinery marks the Europe’s largest cobalt refinery and its refining and precursor know-how complements the expertise and experience of Umicore’s 250 employees.

The acquired operations are expected to supply precursors for the cathode materials production in Nysa, Poland, which is anticipated to start in the second half of 2020.

The Kokkola refinery is expected to be supplied through Umicore’s long-term agreements for sourcing cobalt raw materials from better industrial scale cobalt mining operations, which meet the sustainable framework for cobalt procurement.

Umicore CEO Marc Grynberg said: “This acquisition underlines our commitment to support the rapid growth of our battery materials customers in Europe and supply them with locally produced materials of the highest quality with a certified and clean origin. I am proud of Umicore’s contribution to the accelerating transition to cleaner mobility in Europe and the rest of the world.”