Temiskaming Shores refinery inks three-year deal to supply cobalt for EV batteries
A cobalt refinery in northern Ontario took a big step forward into the electric battery supply chain this week when it signed a three-year deal with LG Energy Solution.
On Thursday, Electra Battery Materials Corp. announced its agreement to supply battery grade cobalt to LGES, a leading global manufacturer of lithium-ion batteries for electric vehicles.
Electra’s refinery complex is located in Temiskaming Shores, near the Sudbury Nickel Basin. The refinery is in the late stages of commissioning and is expected to commence operations in the spring of 2023.
A news release from the company said Electra has agreed to supply LGES with 7,000 tonnes of battery grade cobalt from 2023-2025.
That includes 1,000 tonnes of cobalt contained in a cobalt sulfate product in 2023 and a further 3,000 tonnes in each of 2024 and 2025 under an agreed pricing mechanism.
"In addition to the supply agreement, Electra and LG Energy Solution have agreed to cooperate and explore ways to advance opportunities across North America’s EV supply chain, including, but not limited to, securing of sustainable sources of raw materials," the release said.
Financial terms of the supply agreement were not disclosed. LGES also signed similar agreements with Snow Lake Resources Ltd. and Avalon Advanced Materials Inc.
“LG Energy Solution is a global leader in the electric vehicle supply chain, and we are delighted to sign our first strategic supply agreement with such an important player in the lithium-ion battery market,” Trent Mell, CEO of Electra, said in the release.
“This is only the beginning of a larger strategic relationship with LG Energy Solution involving our other assets and growth initiatives in the North American battery supply chain.”
“As we have recently announced our mid- to long-term strategy to focus on North America, the fastest growing EV market, these partnerships serve as a crucial step towards securing a stable key raw material supply chain in the region,” said Youngsoo Kwon, CEO of LGES.
“By establishing a strategic partnership with Electra, a key critical material supplier and only cobalt refinery in North America, LGES will continue to ensure the steady delivery of our top-quality products, thereby further advancing the global transition to EVs and ultimately to a sustainable future.”
Vic Fedeli, Ontario’s Minister of Economic Development, Job Creation and Trade, said in the release that these types of partnerships are key to future economic growth.
“A key part of our government’s plan to build Ontario is supporting partnerships like this one between Electra and LG Energy Solution,” Fedeli said.
“With our critical minerals strategy, cutting-edge technology and world-class workforce, Ontario has what it takes to build the cars of the future, and we’re proud to see more and more companies come to Ontario for exciting partnerships.”
Cobalt sulfate provided under the term of the contract with LGES could supply up to 1.5 million full electric vehicles.
At full capacity, Electra’s facility will produce enough cobalt to supply up to 1.5 million electric vehicles per year. There are no other cobalt sulfate producers in North America today.
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