Low-carbon battery materials processing company Electra Battery Materials Corp. (ELBM:TSX.V; ELBM:NASDAQ), which is currently commissioning North America's only cobalt sulfate refinery as part of its strategy focused on onshoring the electric vehicle (EV) supply chain, yesterday announced that it had entered into a 3-year contract to provide leading global battery manufacturer LG Energy Solution (373220:KRX) of South Korea with battery grade cobalt for use in making lithium-ion batteries for EVs.
Canada's Minister of Innovation, Science, and Industry, Hon. Francois-Philippe Champagne stated, "Through partnerships like this one, Canada is cementing its position as the world's green supplier of choice in the auto industry and beyond."
Under the terms of the supply agreement, Electra agreed to deliver a total of 7,000 tonnes of battery-grade cobalt at undisclosed prices to LG Energy Solution from 2023 to 2025. Electra stated that the contract calls for shipments of 1,000 tonnes during 2023 and 3,000 tonnes in both 2024 and 2025. The company indicated that the material will be processed at its cobalt sulfate refining facility in Ontario, Canada.
The working agreement between the two firms also includes provisions for cooperation and sustainable sourcing of raw materials for advancing additional EV supply chain opportunities throughout North America.
Electra Battery Materials' CEO Trent Mell remarked, "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 … 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."
LG Energy Solution's CEO, Youngsoo Kwon, commented, "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 toward securing a stable key raw material supply chain in the region … By establishing a strategic partnership with Electra, a key critical material supplier and the 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."
Canada's Minister of Innovation, Science, and Industry, Hon. Francois-Philippe Champagne stated, "Today's announcement is great news for Canada … 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. Through partnerships like this one, Canada is cementing its position as the world's green supplier of choice in the auto industry and beyond."
The company mentioned that at the present time, China produces 71% of the refined cobalt, 76% of the refined nickel, and 93% of the refined manganese that is used in producing batteries for EVs.
The firm stated that changes in public policy and increases in EV adoption rates are aiding in accelerating the development of Electra's refining and battery recycling ecosystem in North America. Electra pointed out that "the U.S. Inflation Reduction Act underscores the importance of creating a domestic EV battery supply chain by extending a $7,500 tax credit for vehicles that do not contain critical minerals sourced from China and Russia."
The company advised that its refinery complex is located north of Toronto, close to the Sudbury Nickel Basin. The firm said that the facility is on course to commence operations in the spring of 2023 and noted that the cobalt sulfate it provides to LGES will be enough to power 1.5 million EVs per year.
Electra stated that it is also considering building a second refinery in Quebec by 2026 to meet rising market demand since there are no other cobalt sulfate producers in North America. The company indicated that the Quebec refinery would potentially source cobalt from its Idaho cobalt and copper project.
The firm listed that it is also engaged in efforts to develop its own black mass battery recycling capabilities with the goal of recovering cobalt, copper, graphite, lithium, and nickel from spent batteries. The company plans to open a demonstration plant before the end of this calendar year and expects that commercial operation could begin in 2023 or 2024.
Electra Battery Materials is a processor of low-carbon, ethically sourced battery materials headquartered in Toronto, Ont., Canada. The company is now in the final stages of commissioning what it claims to be "North America's only cobalt sulfate refinery." In addition to its cobalt sulfate processing and recycled battery materials efforts, the company also is advancing its Iron Creek cobalt-copper exploration project in Idaho.
LG Energy Solution is based in South Korea and is a leading global manufacturer of lithium-ion batteries designed for use in EVs, mobility, IT, and energy storage systems. The firm holds over 25,000 patents in areas related to battery design, materials, and manufacturing. The company is a major battery supplier for many of the world's largest automakers, including GM, Honda, Hyundai, and others.
Electra Battery Materials Corp. began yesterday with a market cap of around $95.46 million with approximately 32.37 million shares outstanding. ELBM shares opened a little over 1% higher yesterday at $2.95 (+$0.04, +1.37%) over the previous day's $2.91 closing price. The stock traded between $2.92 and $4.05 per share yesterday and closed for trading at $3.29 (+$0.38, +13.06%).
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