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Temiskaming could be the North American refining hub to feed the electric vehicle market

First Cobalt unveils ambitious expansion plans to create battery metals industrial park in northeastern Ontario
First Cobalt refinery Rickford visit July 2021
First Cobalt's vice-president of development, Mark Trevisiol, fills in provincial cabinet minister Greg Rickford on the company's construction plans during a site visit last July. (Company photo)

For Trent Mell, it makes little sense to mine the metals needed to power the coming electrical vehicle (EV) revolution here, ship it overseas to Asia refiners to make into battery-grade material, and then send it back to North America to use in car production.

If the president-CEO of First Cobalt has his way, the Temiskaming district will be this continent's centre of production to deliver many of those key ingredients, shorten the logistics journey, and help create a secure home-grown supply chain for EV makers for the first time ever.

The Toronto-based company has construction underway and equipment on order to refurbish the once-shuttered Yukon refinery, located five kilometres outside the town of Cobalt, to begin producing cobalt sulfate for the EV industry by the end of next year.

But during a Nov. 8 webcast to investors, Mell and his team dropped the curtain on hugely ambitious expansion plans that they've been cooking up for several months, while simultaneously raising $45 million in financing this past summer to reactivate the refinery as a one-of-a-kind facility that will be unique to North America.

After dropping hints on a battery park last summer, the company coloured in some of the details in announcing their formal transition as a processor and a chemicals company. 

Their intention is to create a battery metals industrial park on the permitted 120-acre brownfield site with a four-phase expansion that will involve refining cobalt and nickel, recycling spent batteries, and building an upgrading facility called a precursor cathode active materials (PCAM) plant by 2025.

Precursor material involves mixing cobalt and nickel sulfates together with imported manganese which is used in battery cathode manufacturing.

This strategic direction is being capped off with an upcoming rebranding in dropping the First Cobalt name and going with Electra Battery Materials.

Mell and his crew have made it no secret they are all about supplying North American automakers with the cathode material that goes into making lithium-ion batteries.

He calls their Temiskaming refinery a "bridge" to fill a vital gap in the EV manufacturing supply chain between the North American mining industry and the domestic automakers now investing and building battery cell and EV assembly plants.

The battery park they have in mind will mirror similar fully integrated plant complexes around the world, namely the Harjavalta Industrial Park in Finland and the Quzhou Industrial Park in China.

Mell explained they're making this move at the urging of clients and partners who want cobalt, nickel and other precursor materials sourced from one place close to their plants.

"We're not reinventing the wheel," he said. "This is what's happening in the rest of the world. This is not what's happening in North America because of a lack of access to refined materials.

"This is a pull, not a push."

No definitive offtake agreements have been signed with automakers but Mell said they've signed more than 20 non-disclosure agreements and are in talks with mining companies on potential feed and with prospective clients in the EV space. They expect to release more exciting details in the weeks and months ahead leading into 2022.

The first phase of this strategy will be realized in late 2022 when the refinery will be commissioned and they start receiving unrefined cobalt hydroxide from the Democratic Republic of Congo to convert into a cobalt sulfate.

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Besides refurbishing the main 40,000-square-foot building, a new 50,000-square-foot structure will be erected nearby to serve as a solvent extraction plant, designed to remove the impurities from the cobalt feed.

At the refinery site, the company is permitted to produce 5,000 tonnes of refined cobalt sulfate a year, with built-in plans to scale up to meet market demand, according to Mark Trevisiol, vice-president of project development, who ran Glencore's smelter in Sudbury.

Once operating, the facility will be the first of its kind in North America. Currently, China holds an 80 per cent stranglehold on global cobalt refining capacity. Finland has the remainder at 20 per cent.

In the webcall, the company didn't divulge how these next waves of growth would be financed or the potential for job creation, but Mell said they'll likely bring a joint venture partner aboard at some point to speed up development.

They lauded the refinery's location with its good transportation links, a talented workforce, and contractors available; proximity to EV assembly plants in southern Ontario and Detroit; and the nearby raw materials feed, mentioning one of the world's largest nickel belts just a two-hour drive away in Sudbury.

"We've got some huge competitive advantages here," said Mell.

On the recycling front, First Cobalt intends to disassemble spent batteries, remove the 'black mass' material and extract the nickel, cobalt, lithium, graphite and copper.

The company has been running small-scale tests on their hydrometallurgical process for the metals recovery and hopes to move to a full-scale demonstration plant at the site next year.

For the nickel refining, the company said they are in discussions with nickel suppliers and hope to make announcements in the months ahead to proceed toward a tentatively scheduled 2024-2025 start.

"The industry that we're selling into is absolutely booming," said Michael Insulan, First Cobalt's commercial vice-president.

The EV market is here to stay, he said, even if North America is lagging behind the rest of the world. EV market penetration in North America is only five per cent; in Europe it's exceeded 20 per cent.

Looking ahead, global sales of battery electric vehicles and hybrids are expected to increase tenfold, from 3.2 million cars sold in 2020 to 32.2 million vehicles by 2030.

The key drivers are government subsidies and net-zero regulations as well as the greater availability of different models at various price points which are piquing consumer interest. "EVs will become commonplace around the world," said Insulan, leading to increased market demand for cobalt, and greater demand for nickel.

Based on the chemistries used in lithium-ion batteries by manufacturers, nickel is the more dominant material and its demand will outpace that of cobalt, but Insulan said the demand for cobalt still remains "extraordinarily healthy."

With the COP26 conference going on, Mell said they intend to incorporate best industry practices at the refinery with an ESG (environmental, social and corporate governance) profile that's "second to none."

Mell and his company promise a clean carbon footprint with no emissions. The refinery will be entirely powered by a hydroelectric station, located 10 kilometres away.

All the raw product arriving at the site will have third-party certification in its traceability as a responsibly sourced material.

"We're highly confident that we're going to have the cleanest cobalt plant on the planet." said Mell.

First Cobalt first appeared in the Temiskaming area in 2017 as a junior miner, keen on exploring for cobalt and consolidating ground around the historic headframes and mines of turn-of-the-last-century Silver Rush.

They acquired the Yukon refinery almost as a throw-in on a land acquisition deal.

But seeing the open-ended potential of the "diamond in the rough" facility and the commodities trend toward supplying EV manufacturers, they permanently shelved their hunt of cobalt and are selling and optioning their northeastern properties to another mining company to focus solely on the refinery so they can transition into becoming a processor and a chemicals company.

First Cobalt still retains a very promising cobalt and copper property in Idaho, which could be a future feed source for their refinery.

The refinery restart appears to have the full support of the federal and provincial governments in recognizing the company's contribution toward creating a future net-zero emissions economy in Canada.

Ottawa and Queen's Park collectively contributed $10 million before last Christmas toward the facility's commissioning and expansion.