Temiskaming refinery developer Electra Battery Materials has signed a three-year cobalt supply agreement with LG Energy Solution (LGES), one of the world’s largest manufacturers of lithium-ion batteries.
It’s Electra’s first commercial agreement to supply cobalt sulfate from its Temiskaming refinery, now under construction and expected to start production next spring.
Electra has agreed to supply South Korean-based LG with 7,000 tonnes of battery- grade cobalt from 2023 to 2025. Broken down, that’s 1,000 tonnes of cobalt contained in a cobalt sulfate product in 2023 and 3,000 tonnes in each of 2024 and 2025 under an agreed pricing mechanism.
Financial terms of the deal were not disclosed. The term sheet was signed in Toronto on Sept. 22. The signing of a definitive agreement will come in the next few months, Electra said in a news release.
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In the release, Electra hinted LG may help them in securing other sources of raw material needed to supply the North American electric vehicle (EV) supply chain.
“LG Energy Solution is a global leader in the electric vehicle supply chain, and we are delighted to sign our first strategic supply agreement with such an important player in the lithium-ion battery market,” said Trent Mell, Electra CEO in a statement.
“This is only the beginning of a larger strategic relationship with LG Energy Solution involving our other assets and growth initiatives in the North American battery supply chain.”
LG is out to establish a firm foothold in North America to supply this continent’s auto industry.
In a statement, CEO Youngsoo Kwon said the deal fits their mid to long-term strategy to focus on the fast-growing North American EV market and secure a key supply chain component up front.
“By establishing a strategic partnership with Electra, a key critical material supplier and only cobalt refinery in North America, LGES will continue to ensure the steady delivery of our top-quality products, thereby further advancing the global transition to EVs and ultimately to a sustainable future.”
Electra is upgrading and expanding the former Yukon refinery located in the Temiskaming region of northeastern Ontario. The plant is located between the town of Cobalt and the City of Temiskaming Shores.
Electra’s full build-out plan over the next four years is to create an $800-million battery materials industrial park to process cobalt, nickel and manganese into a mixed precursor material that’s needed by the electric vehicle battery makers.
The company is searching for an industrial partner to join them in Temiskaming and build that cathode precursor (pCAM) manufacturing plant.
This complex will be the first of its kind in North America. China dominates the global market in the refining of battery-grade metals.
Also in the works by Electra is a battery recycling operation. A ‘black mass’ pilot plant goes into operation at the site this fall. The processor takes the valuable material extracted from shredded waste batteries - like lithium, nickel, cobalt, graphite and copper - and recycles them into useful material for the battery customers. The full recycling plant goes into operation sometime in 2023-2024.
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The cobalt to be processed into cobalt sulfate in Temiskaming will be imported from the Democratic Republic of Congo. Eventually, Electra wants to bring its cobalt exploration property in Idaho into production and introduce its own feed into the refinery.
Electra said, at full capacity, its Temiskaming site will produce enough processed cobalt to supply up to 1.5 million electric vehicles a year.
Even the politicians are thrilled with the news.
“This agreement between Electra and LG Energy Solution will see Canadian critical mineral resources and Canadian workers helping to build the car of the future,” said federal Innovation, Science and Industry Minister Francois-Philippe Champagne in the release.
“Through partnerships like this one, Canada is cementing its position as the world’s green supplier of choice in the auto industry and beyond.”
Provincial Economic Development, Job Creation and Trade Minister Vic Fedeli said Queen’s Park supports industry partnerships like these.
“With our critical minerals strategy, cutting-edge technology and world-class workforce, Ontario has what it takes to build the cars of the future, and we’re proud to see more and more companies come to Ontario for exciting partnerships.”
