The US Department of Defense has awarded Canada-based Electra Battery Materials Corporation $20 million to support the construction and commissioning of North America’s only cobalt sulfate refinery, capable of producing battery grade materials for lithium-ion batteries.
Today, more than 80% of battery grade cobalt is produced in China. The award was made pursuant to Title III of the Defense Production Act (DPA) to expand domestic production capability and is funded through the Additional Ukraine Supplemental Appropriations Act.
The $250-million refinery project is located north of Toronto, in Temiskaming Shores, and is projected to have the lowest carbon footprint in the world. The company is expanding an existing plant, with permits in hand, construction well underway and most long lead custom equipment at site.
Once fully commissioned, the facility can produce 6,500 tonnes of cobalt per year, which would support the production of more than 1 million EVs annually. LG Energy Solution will purchase up to 80% of capacity over the first five years and several buyers are now competing for the remaining production.
The cobalt feed material will be ethically-sourced from Glencore and Eurasian Resources Group mines in the DRC—material that would otherwise be shipped to China.
In addition to cobalt refining, Electra plans to produce other battery materials that will strengthen the resiliency of the North American supply chain. In 2023, the company operated a plant-scale black mass demonstration plant at its refinery complex, recovering lithium, nickel, cobalt and other critical minerals from batteries. The company is also contemplating a second cobalt sulfate facility in Bécancour, Québec and a strategically located North American nickel sulfate plant.
Title III of the DPA is committed to ensuring resilient, robust domestic supply chains in order to reduce reliance on foreign manufacturing and correct domestic shortfalls in the defense industrial base. To qualify for funding opportunities under DPA Title III, proposed projects must meet the following criteria:
- The industrial resource, material, or critical technology item is essential to the national defense;
- Without Presidential action under 50 U.S. Code §4533, United States industry cannot reasonably be expected to provide the capability for the needed industrial resource, material, or critical technology item in a timely manner; and
- Purchases, purchase commitments, or other action pursuant to 50 U.S. Code §4533 are the most cost effective, expedient, and practical alternative method for meeting the need.
Canada is one of the United States’ closest allies that is eligible for DPA Title III funding, indicating the strong need to secure the global industrial base.