On the eve of a federal election call, Electra Battery Materials has snagged a non-binding letter of intent (LOI) for $20 million to finish the construction of its proposed cobalt refinery in the Temiskaming area.
A March 21 news release from the Toronto company said the LOI was agreed to almost two months ago, on Jan. 27.
It’s not known if the letter of intent will survive a change in government this spring. Electra officials were not immediately available for comment.
Preliminary in nature, Electra cautions the document doesn’t constitute a binding agreement. Discussions with Ottawa continue and there’s no guarantee a final deal will be reached to allow funding to be flowed for the project.
Electra has been refurbishing and expanding a once-mothballed mineral refinery purchased back in 2017. Located between the communities of Cobalt and Temiskaming Shores, the company claims to have spent more than $100 million to bring the once-shuttered Yukon refinery back to life.
However, construction and installation of new equipment has been an on-again, off-again matter due to supply chain problems, inflationary project costs, and difficulties in accessing financing. Raising capital to finish the refinery remains an issue. Electra needs US$60 million, which it plans to raise through government programming and strategic investors.
Last August, the company received a US $20-million award from the U.S. Department of Defense under Title III of the Defense Production Act.
Electra hasn’t provided any updates if U.S. government funding is flowing to the refinery project given the radical policy changes being made by the Trump administration.
In a March 21 statement, Electra CEO Trent Mell said with the permits in hand, new buildings finished and most of the new equipment on site, the company “intends to move swiftly to complete these discussions and resume construction of this strategic asset.”
Electra aims to be the first cobalt refiner in North America and take a piece of processing capacity away from China where the company claims more than 90 per cent of cobalt sulfate production takes place.
Promoted as a low-carbon footprint operation, once running, the Temiskaming plant would produce 6,500 tonnes of cobalt annually, enough, Electra says, to support the production of a million electric vehicles annually.
An investor presentation on the company’s website provided no timelines on project completion and startup.
Should the plant commence operations, Electra said a South Korean battery manufacturer has agreed to scoop up 80 per cent of its finished cobalt product. Mell has maintained that there is competition among the slew of interested buyers that are jockeying for the remainder of their production. He said buyer interest “far exceeds” their projected production capacity at Temiskaming.
Besides cobalt refining, Electra runs demonstration-scale battery recycling at its site that it intends to expand and commercialize at some point to generate some much-needed revenue for the facility. The company said a feasibility study has started to provide more details on what that operation will look like and how it will come about. Electra is also mulling over establishing a second cobalt facility on the south shore of the St. Lawrence River at Bécancour, Que.