Electra Battery Materials Corporation (TSX-V:ELBM, NASDAQ:ELBM) has signed a three-year deal to supply battery grade cobalt to LG Energy Solution, a manufacturer of lithium-ion batteries for electric vehicles, the company announced.
Electra agreed to supply 7,000 tonnes of battery grade cobalt from 2023 to 2025. The material will be supplied from the only cobalt sulfate refinery in North America, located north of Toronto.
Specifically, the company will supply 1,000 tonnes of cobalt contained in a cobalt sulfate product in 2023 and another 3,000 tonnes in 2024 and 2025.
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"LG Energy Solution is a global leader in the electric vehicle supply chain, and we are delighted to sign our first strategic supply agreement with such an important player in the lithium-ion battery market," Electra CEO Trent Mell said in a statement. "This is only the beginning of a larger strategic relationship with LG Energy Solution involving our other assets and growth initiatives in the North American battery supply chain."
Electra and LG Energy Solution have also agreed to cooperate and explore ways to advance opportunities across North America's EV supply chain, including securing of sustainable sources of raw materials.
"As we have recently announced our mid- to long-term strategy to focus on North America, the fastest growing EV market, these partnerships serve as a crucial step towards securing a stable key raw material supply chain in the region," LG Energy Solution CEO Youngsoo Kwon said.
"By establishing a strategic partnership with Electra, a key critical material supplier and only cobalt refinery in North America, LGES will continue to ensure the steady delivery of our top-quality products, thereby further advancing the global transition to EVs and ultimately to a sustainable future."
Electra's low-carbon 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 begin operations in the spring of 2023. Cobalt sulfate provided under the term of the contract will be sufficient to supply up to 1.5 million full electric vehicles. At full capacity, Electra's facility will produce enough cobalt to supply up to 1.5 million electric vehicles per year.
Earlier this month, the company announced plans to build a second refinery in Quebec by 2025-2026.
More broadly, this deal is a big deal for Canada as a whole, according to the country’s minister of innovation, service and industry.
"This agreement between Electra and LG Energy Solution will see Canadian critical mineral resources and Canadian workers helping to build the car of the future,” said Francois-Philippe Champagne. “Through partnerships like this one, Canada is cementing its position as the world's green supplier of choice in the auto industry and beyond."
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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