Establishing the one and only cobalt refining operation in North America provides its own distinct advantages.
Electra Battery Materials (formerly First Cobalt) said prospective customers in the electric vehicle (EV) industry have encouraged them to bump up production plans for the expansion of a refinery outside the town of Cobalt in northeastern Ontario.
The company said in a news release that the designed production capacity will increase from 5,000 tonnes of annual cobalt production to 6,500 tonnes, a 30 per cent improvement in processing capacity.
Electra attributes that to "client feedback and a strong demand for battery-grade cobalt" to feed the North American EV sector.
Last week, the Toronto-based junior miner-turned-chemical processor revealed some of the details behind their ambitious plan to create a battery material park by 2025 in the Temiskaming region to provide EV automakers with access to processed cobalt, nickel, valuable metals extracted from recycled batteries and other precursor material.
Electra has not responded to questions on how many jobs will be created.
The company had budgeted US$60 million to refurbishing the former Yukon refinery with the early stages of construction and ground preparation currently underway.
Now with change in production plans, that capital budget will grow to US$67 million to do more advanced detailed engineering and order more equipment.
The company said construction is on track for first production to start during the fourth quarter of 2022 when unrefined cobalt arrives from the Democratic Republic of Congo for processing into nickel sulfate.
"The strength of the North American electric vehicle market year to date and the growth forecasts of automakers informed our decision to invest in additional capacity even before the initial capacity has been brought online," said Trent Mell, president-CEO of Electra Battery Minerals.
"Likewise, our decision to pursue a more ambitious strategy of producing precursor material, nickel and cobalt, and to recycle batteries is motivated by insights shared by battery cell manufacturers and automotive companies."
Electra said it has signed contracts for equipment orders worth a combined US$22 million, the most expensive items being a cobalt crystallizer and the solvent extraction plant, the latter which will be housed in a new building to be constructed.
The refinery will be supplied by DRC-mined cobalt hydroxide from Glencore and IXM SA, a subsidiary of CMOC (China Molybdenum Co.). Electric said it plans to announce more feed contracts at a later date.