US Awards $20 Million to Electra for North America's First Cobalt Sulfate Refinery

The U.S. Department of Defense (DOD) has awarded $20 million to Canadian company Electra Battery Materials to support the completion of North America's first cobalt sulfate refinery, located in Ontario. This strategic investment aims to boost the production of critical materials essential for lithium-ion batteries used in electric vehicles (EVs) and other advanced technologies.

The Ontario refinery, once operational, will produce 5,000 metric tons per year of precursor cathode active material (pCAM), a key component for EV batteries. The funding, sourced from the 2022 Additional Ukraine Supplemental Appropriations Act, will help Electra overcome financial shortfalls that had stalled the $250 million project. As of mid-May, Electra reported needing an additional $60 million to finish construction.

Electra has yet to announce when the refinery will begin operations, but the company has secured key supply and offtake agreements. In April, Electra signed a three-year deal with Eurasian Resources Group (ERG) to source 3,000 metric tons of cobalt hydroxide annually. Additionally, in July 2023, Electra extended an offtake agreement with LG Energy Solutions, committing to supply 19,000 metric tons of cobalt sulfate over a five-year period starting in 2025.

This project aligns with the DOD's broader goal of strengthening domestic supply chains and reducing U.S. reliance on China, which currently dominates the global cobalt refining market. Electra is also exploring the possibility of establishing a second cobalt sulfate refinery in Quebec and constructing a nickel sulfate plant elsewhere in North America.

In addition to its cobalt production plans, Electra is advancing its efforts to recycle critical minerals from battery scrap. As part of a pilot program, the company has successfully recovered nickel, lithium, and cobalt from 40 metric tons of black mass. In June, the Canadian government awarded Electra $5 million to further these recycling initiatives.

The completion of Electra's cobalt sulfate refinery is expected to play a pivotal role in securing a stable and sustainable supply chain for North America's burgeoning EV market, contributing to the continent's energy independence and technological advancement.