Electra's cobalt refinery still on track

Inching closer to the completion of North America's first battery-grade cobalt sulfate refinery, Electra Battery Materials Corp. issued an update for potential stakeholders as it seeks to secure additional funding to complete this much-needed link in a future EV battery supply chain.

Starting out the month with an announcement that it would continue its black mass recycling operations following an extremely successful trial that saw roughly 40 metric tons of black mass produced in a plant-scale setting, the company has followed up with more data regarding its first-of-a-kind cobalt refinery complex under construction near Toronto, Canada.

"Against the backdrop of our black mass recycling trial and the continued progress of our refinery project, we are focused on addressing our capital requirements and strengthening our relationships with key stakeholders in the broader EV supply chain," said Electra Battery Materials CEO Trent Mell. "We remain actively engaged with government stakeholders to secure US$10.9 million of previously committed funding. We are also encouraged by recent developments on a larger funding solution to complete construction and commissioning of the refinery."

In recent weeks, Electra says it received US$5 million in long-lead, critical equipment, including pressure vessels, tanks, and structural steel needed for the completion of its solvent extraction plant and crystallizer circuit.

The equipment, some of which had been ordered as far back as the second quarter of 2021 and was expected for delivery by fourth-quarter 2022, had been delayed by global supply chain disruptions.

Installation of the equipment delivered will begin alongside the company securing the capital funding required for the project.

Fully permitted and with a present estimated replacement value of approximately US$200 million, Electra estimates that an additional US$55.7 to US$62 million will be necessary to full complete construction.

Toward this approximation, the company has been working on a largely non-dilutive solution with government and industry stakeholders to address the additional capital needs.

Nevertheless, once fully commissioned, the refinery is expected to produce cobalt sufficient for up to 1.5 million electric vehicles per year. In July, Electra announced an expanded and upgraded agreement with LG Energy Solution to provide up to 19,000 metric tons of cobalt contained in sulfate beginning in 2025 – a total that will represent up to 80% of Electra's annual production.

In addition to its partnership with LG Energy Solution, Electra is also reassessing and strengthening agreements with other stakeholders, especially those who call the region of the growing complex home.

"To that end, we continue to advance discussions with a number of potential strategic partners to forge stronger relationships and secure offtake agreements and strategic investments," added Mell. "Among these include our efforts to advance our joint venture with Three Fires Group that is focused on recycling battery waste in Ontario."

Announced in May, Electra signed an initial memorandum of understanding with Ontario First Nation company Three Fires Group to work together in securing a net-zero industrial facility that can be used to recycle spent lithium-ion batteries.

With the waste to be processed at a facility planned for southern Ontario and further refined using Electra's proprietary hydrometallurgical process at its refinery, the joint venture aims to create a hub that supports Indigenous prosperity in alignment with stewardship values.

"Keys to our progress with Three Fires include discussions on the construction of a shredding facility in Ontario that will provide a direct source of black mass feed to our refinery, identification of potential shredding technology, and site visits to shredding technology and equipment providers," said Mell. "We remain encouraged by Three Fires' continued commitment of a strategic investment in Electra."

With no apparent further hangups preventing the eventual completion of its refinery complex, North America can expect a vital link in the EV supply chain in the coming months, or at least sometime before 2025, when it must begin meeting its agreement with LG.