KEY POINTS
- Electra raises $5M to begin refinery work.
- Ontario refinery to reduce EV material reliance on China.
- LG Energy to buy 80% of the first five years’ output.
Electra Battery Materials Corp. (NASDAQ: ELBM; TSXV: ELBM) announced it has secured $5 million in financing from existing lenders, allowing the company to commence early works and winter preparations at its proposed cobalt refinery in Temiskaming Shores, Ontario.
Electra’s cobalt refinery aims for low-carbon production
The company is developing a low-carbon hydrometallurgical cobalt refining complex, which would be the first of its kind in North America. The estimated project cost is approximately $250 million.
Following a series of investments and government funding, Electra required an additional $60 million as of early September to complete the project.
According to mining.com, once fully operational, the facility could produce up to 6,500 tonnes of cobalt annually, supporting the production of more than 1 million electric vehicles per year. South Korea’s LG Energy Solution has committed to purchasing up to 80% of the refinery’s capacity over its first five years of operation.
“Given our objective of resuming construction shortly after completing the project financing package, we are initiating some early works before winter sets in as part of our preparations for the final construction phase of North America’s only cobalt sulfate refinery,” Electra CEO Trent Mell said in a news release.
LG Energy commits to significant cobalt purchase
Mell added that reducing dependence on China in the electric vehicle materials supply chain remains a focus for North American policymakers. “Electra’s refinery is expected to be the first of its kind in North America, with the potential, when operating at full capacity, to produce enough cobalt sulfate for 1 million electric vehicles each year,” he said.
The financing includes $4 million in secured convertible notes and $1 million of Electra’s common shares at $0.543 per share. The notes are convertible to Electra shares at $0.62445 per share, reflecting a 15% premium.
Electra Battery Materials closed Friday’s session up 4.5% at $0.55 on NASDAQ, with a market capitalization of about $31.3 million.
