Electra Battery Materials Corporation (TSX-V:FCC, OTCQX:FTSSF), earlier known as First Cobalt (TSX-V:FCC, OTCQX:FTSSF), has announced a 30% increase in the design capacity of its cobalt refinery.
The Toronto-based company said that the first production is scheduled for 4Q 2022, as part of a phased approach to creating the only battery materials park in North America, providing automakers with direct access to battery-grade nickel and cobalt, recycled battery material, and precursor material.
The company said it will increase its investment in its low carbon Canadian hydrometallurgical refinery and expand the nameplate capacity of its crystallizer circuit to 6,500 tonnes of annual cobalt production due to client feedback and a strong demand outlook for battery-grade cobalt.
This represents a 30% capacity increase from the design rate of 5,000 tonnes per year. The facility will produce 100% of North American supply and 26% of supply sourced outside of China.
READ: First Cobalt unveils plans to create North America's only battery materials park and a name change to Electra Battery Materials Corp
"The strength of the North American electric vehicle market year to date and the growth forecasts of automakers informed our decision to invest in additional capacity even before the initial capacity has been brought online,” said Trent Mell, CEO of Electra Battery.
He added: “Likewise, our decision to pursue a more ambitious strategy of producing precursor material, nickel, and cobalt, and to recycle batteries is motivated by insights shared by battery cell manufacturers and automotive companies."
The company noted highlights including:
- In response to strong customer demand, Electra will invest in additional capacity for its crystallizer circuit, which will result in an installed capacity of 6,500 tonnes of annual cobalt production, a 30% capacity increase from the feasibility study design of 5,000 tonnes
- Commissioning of the cobalt refinery remains on schedule for Q4 2022
- The project control budget for the larger circuit is US$67 million, which can be funded from the treasury, compared to a feasibility study estimate for a smaller plant of US$60 million
- Ground excavation has commenced for a new solvent extraction facility and contracts have been awarded for the foundations and building construction
- Previously announced MoU with IXM SA for cobalt hydroxide feed material has been formalized as an executed contract
- A replay of the November 8 investor call discussing new corporate strategy and name change from First Cobalt to Electra Battery Materials is now available on the Company's website
Electra Battery said that construction remains on schedule to commission the refinery in 4Q 2022 and initially ramp up to 5,000 tonnes per year. Permit amendments will be sought for the incremental capacity to permit the facility to ramp up from 5,000 to 6,500 tonnes.
Moreover, the company has signed contracts and purchase orders with commitments totaling US$22 million. Contracts have been awarded for the two most expensive components of the refinery – the cobalt crystallizer and the solvent extraction plant.
The capital budget is currently estimated at US$67 million, including a contingency amount of US$3.9 million. This represents a $7 million or 11.67% increase from the previously announced capital cost estimate of US$60 million.
Part of the additional cost is related to the decision to increase production by 30% as well as changes in foreign exchange and increased construction material costs compared to the original engineering study.
The company noted that from the revised project capital budget, approximately US$5 million has been spent so far, primarily on equipment deposits.
Electra Battery’s current working capital on hand is approximately US$54 million. Additionally, the committed funding from the governments of Ontario and Canada will provide a further US$8 million (C$10 million), which gives overall liquidity of approximately US$62 million to use moving forward.
The company is building North America's only fully integrated, localized, and environmentally sustainable battery materials park. Leveraging the company's own mining assets and business partners, the Electra Battery Materials Park will host cobalt and nickel sulfate production plants, a large-scale lithium-ion battery recycling facility, and battery precursor materials production, which will serve both North American and global customers.
Contact Ritika at ritika@proactiveinvestors.com