Canada’s Electra Battery Materials Corp. has signed a three-year deal to supply electric vehicle battery cell manufacturer LG Energy Solution (LGES) with cobalt 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 to 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 an important player in the lithium-ion battery market.”
“This is only the beginning of a larger strategic relationship with LGES involving our other assets and growth initiatives in the North American battery supply chain,” he said in a release.
Electra is partway through recommissioning what would be North America’s only cobalt refinery. Situated roughly 500 kilometres north of Toronto, straddling the city limits of Temiskaming Shores and Cobalt, Ont., the site was initially developed in the 1990s, but is being upgraded and expanded.
Electra had planned to begin ramping up production of cobalt at the plant late this year, but delays to shipments of “critical equipment” forced it to reschedule the start of operations to spring 2023. The company also hiked projected costs for the project in August, to between US$76 and $80 million, up from $67 million originally.
Once fully operational, the cobalt sulfate refinery in Temiskaming Shores will be capable of producing about 6,500 tonnes of cobalt sulfate per year — enough to power battery cells in about 1.5 million EVs.
The deal with LGES covers nearly half of this capacity in its latter years. Electra said the battery cell maker will receive 1,000 tonnes of cobalt sulfate in 2023, and 3,000 tonnes in each 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 crucial step towards securing a stable key raw material supply chain in the region,” he said in a release.
The two companies also plan to collaborate on securing sources of raw materials for the North American EV supply chain. Electra is currently developing a cobalt mining project in Idaho, but Mell told Automotive News Canada last fall that the company’s Ontario refinery will initially source cobalt from the Democratic Republic of the Congo, where the majority of the world’s cobalt is mined.
Details about what cell manufacturing plants will receive the Ontario-produced cobalt sulfate were not immediately available.
The South Korean battery maker has a stake in a growing list of North American projects. In partnership with Stellantis, LGES announced plans to build a C$5 billion battery cell plant in Windsor, Ont. 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 on two other Ultium Cells plants is under way in Tennessee and Michigan, with one further plant in planning.