The construction delays to finish up a Temiskaming cobalt refinery doesn’t seem to be bothering a future customer.
Electra Battery Materials, the refinery owners, announced it has renegotiated and extended its cobalt supply agreement with LG Energy Solution from a term of three years to five years.
Toronto-based Electra struck the original agreement with LG last September. At the time, it translated to pre-selling 60 per cent of the refinery’s anticipated cobalt sulfate production, about 7,000 tonnes. The new five-year deal targets 19,000 tonnes.
South Korean-headquartered LG is one of the world’s largest battery cell manufacturers.
Electra’s Temiskaming cobalt refinery is not yet in operation. The company has been struggling with a cash crunch and other issues to finish the plant. Electra launched a strategic review process in May and has not yet provided a new timeline to finish the $121-million project.
In the meantime, it’s focused on the battery recycling side of the business and refining all the valuable metals extracted from spent batteries. The first shipment of product went out the door recently to an unidentified customer,
Electra CEO Trent Mell said he isn’t flustered by the delay. Neither, it appears is LG Energy.
In an online interview this week with Steve Darling of Proactive Investors, Mell said being delayed a year on the cobalt refinery, “doesn’t matter."
"The demand is gonna be there. It’s a nine-inning game, we’re in the second inning now. That strong demand continues unabated.”
With battery cell manufacturing plants being rapidly built in Canada and the U.S., Mell said there’s interest in their product from both sides of the border.
Washington’s Inflation Reduction Act has “really magnified the intensity of that push” in cobalt sulfate, which is a key ingredient needed in lithium-ion batteries.
Mell told Darling 80 per cent of their cobalt production has now been presold and they are working on a second agreement. He also mentioned he’s expecting funding from government agencies to help pick up the pace of construction at the refinery.