Electra Battery Materials Corporation (NASDAQ: ELBM) (TSXV: ELBM) Expands Cobalt Supply Agreement with LG Energy Solution

July 25, 2023 at 10:59 AM EDT

Electra Battery Materials Corporation (NASDAQ: ELBM) (TSXV: ELBM) has extended and enlarged its cobalt supply agreement with global lithium-ion battery manufacturer, LG Energy Solution (“LGES”). The revised agreement now sees Electra supplying LGES with 19,000 tonnes of battery grade cobalt over a five-year period commencing in 2025. This cobalt will be sourced from North America’s sole cobalt sulfate refinery, situated north of Toronto, Ontario.

Revised Supply Agreement Terms

Compared to the original agreement, Electra will now provide LGES with a significantly larger amount of cobalt contained in cobalt sulfate. The updated agreement entails an initial supply of 3,000 tonnes in 2025, followed by an annual supply of 4,000 tonnes through to 2029. This comprehensive agreement will enable LGES to bolster its position as a global leader in the electric vehicle supply chain, enhancing its investments in Ontario and collaborations with Canadian mineral and battery material companies.

Cooperations in North American EV Supply Chain

Consistent with the first agreement, Electra and LGES will continue to identify and develop opportunities throughout North America’s EV supply chain. This cooperation includes securing sustainable raw material sources. However, the financial conditions of the updated supply agreement have not been disclosed.

Electra’s Contribution to North American Refining and Battery Recycling Ecosystem

Electra’s role in developing a refining and battery recycling ecosystem in North America is pivotal, especially considering China’s current dominance in the production of refined cobalt, nickel, and manganese used in EV batteries. The U.S. Inflation Reduction Act has further highlighted the importance of creating a domestic EV battery supply chain, a move encouraged by offering a $7,500 tax credit for vehicles free from critical minerals sourced from China and Russia.

Advancements in Electra’s Refinery and Recycling Trials

Electra’s hydrometallurgical refinery complex, currently under construction in Temiskaming Shores near the Sudbury Nickel Basin, will be the site of a black mass recycling trial. The plant-scale trial aims to recover valuable elements, including lithium, nickel, cobalt, manganese, and graphite from expired lithium-ion batteries. As of now, Electra’s results from its plant-scale trial have met or surpassed those obtained in the laboratory, with commercialization expected in 2024, subject to completion of funding commitments.

Electra’s Battery Material Park at Full Capacity

When fully operational, Electra’s battery materials park could manufacture enough cobalt sulfate to fuel up to 1.5 million electric vehicles annually and process 2,500 tonnes of black mass materials per year. Construction of the company’s cobalt refinery is ongoing, with additional capital being pursued from various sources. A current private placement by the company, coupled with a strategic investment from Three Fires, is set to expedite the company’s plan for a 2,500-tonne battery black mass refining operation.

Disclosure: No position. Spotlight Growth has no relationships with any of the companies mentioned in this article and did not receive payment in any form for its creation. This is an opinion article and is not meant to be financial advise. We are not broker-dealers or investment professionals. Please conduct your own due diligence. For more information on our disclosures, please visit: https://spotlightgrowth.com/disclosures/

The post Electra Battery Materials Corporation (NASDAQ: ELBM) (TSXV: ELBM) Expands Cobalt Supply Agreement with LG Energy Solution appeared first on Spotlight Growth.

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