Cobalt refinery developer Electra Battery Materials has signed a term sheet with the province to access $17.5 million in potential funding to finish construction of its Temiskaming facility.
In a Sept. 12 news release, the Toronto-based company cautions that the term sheet with Invest Ontario, a provincial government agency, doesn’t constitute a binding agreement, only an intent toward completing a definitive agreement. Discussions with the government are ongoing, the company said.
On when a definitive agreement is expected to be reached and when full construction would resume, Electra spokesperson Heather Smiles said those processes are still in motion.
“We are working closely with the province to complete the documentation as quickly as possible — reaching this stage has involved significant diligence on the part of the province. We intend to focus on construction and provide an update on timelines once we complete the current restructuring and financing transactions underway — these processes are expected to close in early October.”
Electra had been short $60 million to finish the mothballed refinery, located between the Town of Cobalt and Temiskaming Shores.
The company acquired the former Yukon refinery in 2017 and has spent millions refurbishing and enlarging the once-closed minerals processing mill to produce cobalt sulfate, a key ingredient used to make lithium-ion batteries. It would be the first refinery of its kind in North America.
When money became an issue due to inflation and the pandemic, exacerbated by supply chain difficulties, Electra halted construction in 2023.
But back in March, Electra signed a non-binding letter of intent with the Government of Canada to access $20 million to help finish the refinery. The agreement was described at the time as being preliminary in nature as discussions with Ottawa were continuing.
Before that, in August 2024, Electra received a US$20-million award from the U.S. Department of Defense under Title III of the Defense Production Act.
On the private financing side, Electra launched a major financial restructuring last month, which included a debt-to-equity conversation and US$30 million in equity financing. The plan is to reduce the company’s convertible debt by 60 per cent in order to strengthen its capital structure. The proceeds are earmarked for refinery construction and to ramp up its battery recycling program. The offering closes Oct. 15.
And back in September 2024, Electra said there was an announced US$20-million corporate investment from an undisclosed, arm's-length strategic player.
“We are grateful for the support from Invest Ontario, which will help accelerate construction and reinforces confidence in the strategic importance of our project,” said Electra CEO Trent Mell in a statement.
“Establishing a domestic supply of battery-grade cobalt is essential to reducing reliance on foreign-controlled supply chains, safeguarding economic and energy security, and ensuring that Canada plays a leading role in the global energy transition.”
Economic Development, Job Creation and Trade Minister Vic Fedeli chimed in: “Electra’s investment in Temiskaming Shores will establish an integral link in the province’s critical mineral processing supply chains and fuel the next stages of Ontario’s leadership in electric vehicle battery manufacturing.”
Once completed, Electra said the refinery will produce 6,500 tonnes of battery-grade cobalt sulfate annually, enough to support the production of up to one million electric vehicles per year, and is expected create more than 50 refinery jobs.
Electra has maintained that its cobalt refinery is just the starting point to build out capacity in Temiskaming to do more critical minerals processing and create other battery-grade material for the North American supply chain. This includes a commercial-scale battery recycling plant that’s now at the demonstration scale.
