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The Drift: Temiskaming cobalt, nickel refinery will be an $800M venture

Facility will produce enough battery-grade material to support manufacturing of 250,000 electric cars a year
Electra solvent extraction plant 1
Construction of a solvent extraction plant for a cobalt refinery in Temiskaming (Electra Battery Materials photo)

The price tag to build a Temiskaming battery materials industrial park will be in the neighbourhood of $720 million to $850 million.

Electra Battery Materials announced the results of a scoping study this week that crunched the economic numbers of the proposed development situated between the town of Cobalt and Temiskaming Shores. The property hosts the former Yukon refinery, which is being upgraded and expanded. 

The Toronto company is constructing a cobalt refinery, the first part of a hugely ambitious four-phase industrial development on the 600-acre property. Electra wants to serve the North American electric vehicle (EV) market with battery-grade material. 

The larger anticipated complex would combine the refining of nickel, cobalt and possibly manganese, with the recycling of waste battery material, to create an upgraded product, called precursor cathode active material (pCAM), that would be shipped to battery cell manufacturers engaged in the North American EV industry. Electra would like to add an industrial partner to help with the pCAM operation. 

The commissioning of the cobalt plant is slated for next spring. This would be North America's first such facility. Nickel processing is involved in the eventual site plan build-out. 

This fall, the company anticipates flipping the switch on a small-scale battery material recycling plant on the site, which will be for demonstration purposes only.

The scoping study examined the construction of a battery-grade nickel sulfate refinery by 2025-26. The study was financed by the federal and provincial governments, Glencore and Talon Metals.

The proposed facility would produce 10,000 tonnes of battery-grade nickel sulfate a year and the equivalent amount of pCAM materials, enough to support the manufacturing of 250,000 electric vehicles annually.

The annual operating costs of the facility would range between US$125 million and $133 million, or between US$13,000 and $13,600 per tonne of nickel sulfate.

The wider impact of such a development would generate US$225 million in GDP impact during the construction phase alone, including $112 million in salaries and $35 million in taxes. There would be an additional US$415 million in spinoffs during the first decade of production, including $111 million in salaries and $78 million in taxes.

In a statement, Electra CEO Trent Mell said U.S. car makers are moving fast to reduce their reliance on importing critical minerals from China and Russia and are looking to domestic sources of supply. All of this is spurred on by the recent passing of the U.S. Inflation Reduction Act, allowing Canadian manufacturers to supply American automakers with battery materials. 

“The scoping study supports our view that an integrated refining-recycling-pCAM battery materials complex in Ontario would deliver compelling economics, emit low carbon emissions and address the on-shoring of battery materials needed by the North American automotive industry.

“Backed by compelling project economics, we are now proceeding with an engineering prefeasibility study to narrow our focus on feed sources and devise a multi-phased approach to growing nickel refining capacity in North America."

Last month, the company said it has signed memorandum of understanding with some undisclosed customers for their product, but have yet to finalize the details. The cobalt feed that will arrive in Temiskaming early next year will come from mines in the Democratic Republic of Congo.  Eventually, Electra wants to supply the refinery with feed from its cobalt property in Idaho.