Electra Battery Materials Corporation (TSX-V:ELBM, OTCQX:ELBMF) announced an offtake agreement for nickel and cobalt produced from a battery recycling plant that it expects to commission in 2023 at its Battery Materials Park north of Toronto.
Under the agreement, the company said Glencore AG will purchase nickel and cobalt products until the end of 2024 on market-based terms.
"The demand for recycled battery materials is very strong but there is limited refining capacity in North America today to treat black mass with a hydrometallurgical process - the preferred route due to high metal recoveries and near-zero GHG emissions," said Electra CEO Trent Mell in a statement.
"Electra expects to be one of the first such refiners, leveraging its permitted site north of Toronto and approximately C$100 million of existing infrastructure and equipment.”
READ: Electra Battery Materials to consolidate outstanding common shares ahead of potential Nasdaq listing
Mell added: "This is another step in de-risking Electra's Battery Materials Park project. By securing an offtake for our recycled nickel and cobalt production at market rates, we can now continue to focus on construction and operational readiness for Phase 1 and Phase 2."
Highlights of the agreement include:
- Offtake contract covers 2023-2024 production of nickel and cobalt from refining black mass feed generated from lithium-ion batteries. Offtake contracts for lithium, copper, and graphite are under discussion with other parties.
- Electra plans to operate a battery recycling demonstration plant in 2022 using existing equipment at a cost of C$3 million and commission the commercial plant in 2023.
- The company's hydrometallurgical refinery is expected to provide higher yields at a lower cost and at significantly lower energy intensity compared to traditional facilities.
- Its refinery is 100% powered by clean, hydroelectric power, resulting in nearly zero greenhouse gas (GHG) emissions.
Electra noted that its battery recycling strategy is the second of a four-phase development plan for an integrated battery materials park in Canada that will recycle lithium batteries, produce cobalt and nickel from primary feeds, and then send the material to a battery cathode precursor manufacturer that would co-locate within the same industrial park. The commissioning of North America's only cobalt sulfate refinery is the first phase, which is scheduled for December 2022.
Electra's strategy is to partner with third parties who collect spent batteries and shred the battery cell electrodes into a metal-rich powder known as "black mass". Electra has established relationships with more than 30 black mass producers and expects to work with up to four providers to supply feed to its refinery.
The company said the first recycling module (Module 1) is expected to produce more than 2,000 metric tonnes per annum of mixed hydroxide precipitate (MHP) from approximately 4,500 tonnes of black mass -- the equivalent of recycling batteries from more than 20,000 full electric vehicles (EVs) per year, or 80,000 plug-in hybrid EVs. Module 1 is one of several modules expected to be constructed over the next decade, as Electra's recycling capacity grows with market demand for the processing of black mass.
Electra's long-term objective is to feed cobalt and nickel content in MHP into its own cobalt and nickel sulfate circuits. Glencore's Nikkelverk refinery in Norway represents a near-term and low-carbon solution to a circular economy until such time as Electra has completed its Phase 3 construction of a nickel sulfate plant.
The company said its commercial relationship with Glencore is a foundational step that could lead to further collaboration within the North American recycling market. Glencore is already one of the largest processors of black mass, treating a large portion of black mass produced in North America and Europe at its Sudbury smelter.
Contact the author: patrick@proactiveinvestors.com
Follow him on Twitter @PatrickMGraham