Canada's Electra awarded $20 million from US DOD for cobalt refinery project

Canada's Electra Battery Materials has been awarded $20 million by the US Department of Defense to support the construction and commissioning of its cobalt sulfate refinery, the company said Aug. 19.

The $250 million refinery project is located north of Toronto, and would be the only cobalt sulfate refinery in North America.

The DOD funding comes from the Defense Production Act to expand domestic production capability and is funded through the Additional Ukraine Supplemental Appropriations Act, Electra said. Currently, more than 80% of battery grade cobalt is produced in China.

"Electra is committed to strengthening the resiliency of the North American battery supply chain," CEO Trent Mell said in a statement. "...On issues of national security, there are no borders between Canada and the United States. We are proud to partner with the US Government to build a strong North American supply chain for critical minerals."

Once fully commissioned, the facility can produce 6,500 metric tons/year of cobalt, which would support the production of over 1 million EVs annually, according to the company.

LG Energy Solution will purchase up to 80% of capacity over the first five years and "several buyers are now competing for the remaining production," Electra said.

Electra expanded its cobalt supply agreement with LGES in July 2023, with the South Korean battery manufacturer to take 19,000 metric tons of battery-grade cobalt over a five-year period beginning in 2025.

The cobalt feed material for the facility will be ethically-sourced from Glencore and Eurasian Resources Group mines in the Democratic Republic of Congo -- material that would otherwise be shipped to China, Electra said.

Platts, part of S&P Global Commodity Insights, assessed battery grade cobalt sulfate at $4,800/t on a CIF North Asia basis Aug. 19.