Yesterday, Electra Battery Materials announced the signing of a three-year agreement to supply battery-grade cobalt to lithium-ion battery player LG Energy. 

Electra has agreed to supply LG with 7kt of battery-grade cobalt (contained) between 2023 to 2025.  An initial 1kt will be supplied in 2023 with 3kt shipped in 2024 and 2025.  The partners have also agreed to cooperate and explore ways to advance opportunities across North America’s EV supply chain, including, but not limited to, securing sustainable sources of raw materials.  Project Blue understands that Stratton Metal Resources has a backstop purchase option to sell 100% of Electra's cobalt sulphate under a five-year contract, while offtake deals are being finalised.   

Electra’s hydrometallurgical refinery complex is located in Temiskaming Shores, near the Sudbury Nickel Basin. The refinery is in the late stages of commissioning and is expected to commence operations in Q1 2023.  Thereafter, Electra has plans to commence recycling and black mass recovery in 2023, nickel sulphate production in 2024 and precursor manufacture in 2025.  It also intends to bring its Iron Creek mine online by the end of the decade. 

Electra aims to target the North American market, and specifically OEM and cell maker requirements for local, sustainable battery material supply.  The cobalt production landscape in North America is mixed. 

Canada is a mine-, intermediate- and refined producer of cobalt. It accounts for ~2% of global mine and intermediate output each year, and around 4% of global refined production. The dominant cobalt-producing mines are owned by Glencore (Raglan and Sudbury INO) and Vale (Thompson and Voisey's Bay) and there are several projects looking to enter production over the coming years. Vale's assets are integrated in-country, with its refineries producing cobalt rounds. Glencore, however, exports cobalt intermediates from its Sudbury Smelter to its Nikkelverk operation in Norway. Meanwhile, Sherritt International produces briquettes in Canada based on imported feedstock from Cuba (the Moa JV). Refined production may soon increase in Canada if Electra is successful in bringing its refinery to production. 

Meanwhile, the USA is a big importer with minimal assets.  It is a small-scale mine producer through Lundin's Eagle mine but has no refining capacity.  Mine projects with near-term prospects in the USA include Jervois Global’s Idaho Cobalt Operations (ICO) Project, PolyMet Mining’s NorthMet Project, and Electra’s Iron Creek Cobalt Project.