After signing an MOU in May, Indigenous-owned Three Fires Group and Electra have solidified plans to advance battery recycling in Ontario

The Three Fires Group, an Indigenous-owned development group based on Kettle and Stony Point First Nation, near Sarnia, Ont., is taking another step towards becoming a significant player in Ontario’s critical minerals and EV battery sector. 

Less than two months ago, Three Fires signed a battery minerals recycling memorandum of understanding (MOU) with Toronto-based Electra Battery Materials Corp. Now, the group has committed to be an investor in a planned $20-million financing to advance Electra’s recycling strategy and development of its battery materials park in Temiskaming Shores in northeastern Ontario.

“We are excited for this opportunity as a strategic path forward in allaying our shareholder First Nation’s concerns around the rapidly growing EV battery manufacturing sector in southwestern Ontario,” said Phil Lee, CEO of Three Fires, in a press release announcing the plan on June 26. 

News of the financing plan also comes after a successful black mass recycling trial at Electra’s battery materials park. 

Accelerate development

“The strategic investment by Three Fires will help us to prioritize our focus and accelerate development of a permanent 2,500 tonne per annum recycling refinery,” said Trent Mell, CEO of Electra, in the same release. 

The terms of the agreement are not yet final. But market expectation is that the Three Fires Group will purchase Electra units (consisting of shares and share warrants) through a non-brokered private placement.

In the statement, Electra outlined that the units would cost $1.10. Each unit will consist of one common share of Electra (a price of $1.10) and one common share purchase warrant. The latter may be exercised at a price of $1.74 per warrant over a 24-month period.

“We see this strategic relationship as an opportunity to position Electra as a platform for greater participation by First Nations in the transition to a low-carbon economy, particularly relating to lithium-ion battery recycling,” Mell added. 

Reining in battery waste

In May, Electra and Three Fires announced plans to form a joint venture targeted at recycling lithium-ion battery waste generated primarily in southern Ontario.

As part of that MOU, the two groups agreed to secure a net-zero facility that will shred and convert lithium-ion batteries to produce black mass material. 

Thereafter, the black mass will go to Electra’s refinery complex north of Toronto to recover elements like lithium, nickel and cobalt. The $20-million financing aims to accelerate development of that refinery facility. 

Lee said that these investments are becoming increasingly important as more batteries reach their end-of-life cycle in the coming years. 

“What we desperately need is a clear plan to recycle the estimated 30 tonnes per day of EV battery manufacturing waste that is expected to be generated on our traditional lands,” Lee said. 

Completion of Three Fires’ strategic investment is contingent on Electra securing additional financing of not less than $10 million. It is currently talking with various government and third-party stakeholders to raise those funds.

Furthermore, the completion of the investment also requires approval by the TSX Venture Exchange.