Canada’s Electra Battery Materials Corp. has signed a three-year contract to supply electric vehicle battery cell manufacturer LG Energy Solution (LGES) with cobalt to be processed in Northern Ontario.
The Toronto-based mining and battery materials company said Sept. 22 that the agreement covers shipments of 7,000 tonnes of the key battery metal produced at Electra’s cobalt sulfate refinery between 2023 and 2025.
Financial terms of the deal were not disclosed.
Electra CEO Trent Mell said the company is “delighted” to sign its first strategic supply agreement with “such a key player in the lithium-ion battery market.”
“This is just the beginning of a larger strategic relationship with LGES that encompasses our other assets and growth initiatives in the North American battery supply chain,” he said in a press release.
Electra is in the midst of restarting North America’s only cobalt refinery. The site is approximately 500 kilometers north of Toronto and spans the city limits of Temiskaming Shores and Cobalt, Ontario. The site was originally developed in the 1990s but is currently undergoing modernization and expansion.
Electra had planned to start ramping up cobalt production at the plant later this year, but delays in “critical equipment” shipments forced it to delay startup until spring 2023. The company also raised the projected cost for the project in August. from originally $67 million to $76-$80 million.
Once fully operational, the cobalt sulfate refinery at Temiskaming Shores will be able to produce about 6,500 tons of cobalt sulfate per year – enough to power battery cells in about 1.5 million electric vehicles.
The contract with LGES covers almost half of this capacity in recent years. Electra said the battery cell maker will receive 1,000 tons of cobalt sulfate in 2023 and 3,000 tons each in 2024 and 2025.
LGES CEO Youngsoo Kwon said the agreement will contribute to the company’s strategic plans for North America.
“These partnerships serve as a critical step in securing a stable supply chain for key commodities in the region,” he said in a press release.
The two companies also plan to work together to secure raw material sources for the North American electric vehicle supply chain. Electra is currently developing a cobalt mining project in Idaho, but Mell said Automotive News Canada last fall that the company’s Ontario refinery will initially source cobalt from the Democratic Republic of the Congo, where most of the world’s cobalt mining occurs.
Details on which cell factories will receive the cobalt sulfate produced in Ontario were not immediately available.
The South Korean battery maker is involved in a growing list of North American projects. In partnership with Stellantis, LGES announced plans to build a $5 billion battery cell factory in Windsor, Ontario. this March. The company is also a partner in General Motors Co.’s Ultium Cells joint venture, which opened its first plant in Ohio in August. Construction of two additional Ultium Cells plants in Tennessee and Michigan is underway and one more plant is planned.