New investments of $54 million from a strategic battery materials partner and the U.S. Department of Defense bring a new cobalt sulphate refinery in Ontario closer to reality

Electra Battery Materials Corp. has secured a $27-million (US$20 million) investment proposal from an undisclosed player in the battery materials sector to support the construction and commissioning of its cobalt refinery plant.

The amount matches funding the company received from the U.S. Department of Defense last month.

“Interest from sophisticated strategic partners indicates strong confidence in Electra,” says Trent Mell, CEO of Electra, in a statement.

“With the continued support of investors, governments and downstream customers, we are well-positioned to realize our vision of a North American battery materials supply chain.”

Electra is on track to building the first cobalt sulphate refinery capable of producing battery-grade materials in North America. The company owns a low-carbon hydrometallurgical refining complex north of Toronto which is being expanded and modified to process cobalt sulfate for lithium-ion batteries. 

Electra’s goal is to produce battery materials to enhance and strengthen the resiliency of the North American supply chain. The cobalt sulphate produced at the refinery will provide a crucial alternative to current sources, in which more than 90 per cent comes from Chinese companies.

The company says the refinery will play a vital role in reducing North America’s reliance on China for critical battery materials.

Past financial roadblocks

Since early 2020, Electra has been working to refurbish and rebuild its previously shuttered refinery. However, due to rising production costs and supply chain delays, the company faced financial challenges and had to suspend work at the refinery in August 2023.

Now, a year later, Electra is on more stable financial footing and is actively working to raise the remaining $80 million (US$60 million) needed to complete its $340-million (US$250-million) cobalt facility.

The latest investment proposal, if finalized, will bring in $10 million immediately, followed by an additional $10 million during the refinery’s commissioning phase.

The proposed investment is contingent on progress in other ongoing financing discussions. Electra is working to secure additional non-dilutive financing sources, such as government programs, to help fund the refinery’s construction and commissioning.

In February, the Federal Economic Development Initiative for Northern Ontario (FedNor) awarded the company a $5-million grant in support of the project.

Electra’s short- and long-term vision

The timeline for when the cobalt refinery will be completed remains uncertain, but Mell has previously stated that construction could be completed within 12 months once the remaining funding is secured.

Once operational, the refinery will process ethically mined cobalt hydroxide from Eurasian Resources Group’s mine in the Democratic Republic of the Congo, converting it into cobalt sulphate, a mineral critical to making cathodes for electric vehicle batteries.

Electra expects the refinery to produce up to 6,500 tonnes of cobalt annually. This would be enough material to supply batteries for more than one million EVs per year.

LG Energy Solution has already committed to purchasing up to 80 per cent of the refinery’s output over the first five years. Several other buyers are now competing for the remaining supply, says Electra.

Beyond cobalt refining, Electra plans to produce other key battery materials.

In 2023, the company operated a year-long battery recycling demonstration at its refinery complex, processing more than 40 tonnes of black mass material, recovering high-quality nickel, cobalt, lithium, and other critical minerals.

Looking to the future, Electra envisions expanding its operations to include nickel production and battery recycling, onshoring additional critical mineral refining processes needed for the North American EV battery supply chain.

Electra is also exploring the possibility of building a second cobalt sulphate refinery in Bécancour, Que.