Pentagon funds cobalt refinery plant expansion in northern Ontario

A battery materials refinery plant south of Temiskaming Shores has signed a multi-million-dollar contract with the United States military for a large expansion.

Electra Battery Materials aims to create a cobalt sulfate production plant at its refinery in North Cobalt for use in electric vehicles.

The U.S. Department of Defense (DOD) at the Pentagon is providing $20 million to support the construction and commissioning of North America’s first and only cobalt sulfate refinery capable of producing battery-grade materials for lithium-ion batteries.

The award was made through the Title III of the Defense Production Act to expand domestic production capability and is funded through the Additional Ukraine Supplemental Appropriations Act.

“The goal is to get this up and running so it can go for 100 years. It is really meaningful for northern Ontario and for creating its role in the battery supply chain,” said Electra Battery Materials CEO Trent Mell.

A Pentagon spokesperson said the goal is to broaden domestic production of critical minerals.

“This award will develop North American production of a key precursor material for large capacity batteries, helping to create a more robust industrial base capable of meeting growing demand across both the defence and commercial sectors," said Dr. Laura Taylor-Kale, Assistant Secretary of Defense for Industrial Base Policy in a news release from the Pentagon.

The Pentagon is providing $20 million to support North America’s first cobalt sulfate refinery capable of producing battery-grade materials for lithium-ion batteries at Electra Battery Materials south of Temiskaming Shores. (Eric Taschner/CTV News)

The City of Temiskaming Shores is celebrating the deal, in particular the new jobs and the impact the plant will have on northeastern Ontario.

“We’re talking 60 full-time jobs for the plant. The spinoff employment is usually three to one. So, we’re talking about 240 jobs for the region,” said Temiskaming Shores Mayor Jeff Laferriere.

“There are lots of equipment that has been purchased with funds. But you know, this announcement is going to allow them to start installing that equipment.”

Down the line, the project aims to bolster North America’s electric vehicle industry, hoping to diversify critical supply chains away from China and back to Canada and the U.S.

Currently, more than 80 per cent of battery-grade cobalt is produced in China.

The plan is to sell up to 80 per cent of the material to LG Energy Solution Ltd., a South Korean battery manufacturer partnering with automakers to build plants in Canada and the U.S.

'This is just the start'

“This is just the start. We need cobalt, we need nickel. We need to recycle batteries and manganese. Think of this as a chemicals complex,” Mell said.

The U.S. military said the plant will lead to a “sustainable domestic processing facility capable of producing commercial-scale levels of a critical precursor material for large capacity batteries,” which many military systems south of the border rely on.

Electra has invested $280 million into the plant so far. There is a lot more funding still needed for the project to come to full fruition.

Mell would like to see operations start in 2026.

“We’ve got a third of the $80 million, if we stick to Canadian dollars," he said.

"We do talk to the Government of Canada and have had conversations … The go-forward strategy is going to be to look at the programs out there and the strategic investors, as well.”

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Once fully commissioned, the facility will produce 6,500 tonnes of cobalt a year. The company estimates that’s enough to support the production of one million EVs annually.

In addition to cobalt refining, Electra plans to produce other battery materials that will strengthen the resiliency of the North American supply chain.

In 2023, the company operated a plant-scale black mass demonstration at its refinery complex, recovering lithium, nickel, cobalt and other critical minerals from batteries.

The company is also contemplating a second cobalt sulfate facility in Bécancour, Que., and a strategically located North American nickel sulfate plant.