Electra signs recycling, cobalt supply deal with Marubeni

Electra Battery Materials (TSXV: ELBM; US-OTC: ELBMF) has signed a battery recycling and cobalt sulphate supply agreement with Japanese conglomerate Marubeni. The two have signed a memorandum of understanding that covers the sourcing of black mass derived from lithium-ion batteries for Electra’s refinery in Cobalt, Ontario, and the marketing of Electra’s cobalt sulphate in Japan.

Electric will sell a portion of the cobalt into existing li-ion battery markets in Japan that serve the North American market. Marubeni has a wide network of battery recyclers in Asia and elsewhere from which to source the black mass material.

Electra is on track to commission its near-zero hydrometallurgical cobalt refinery in late 2022.

The biggest advantage is that a hydrometallurgical plant will have 51% lower greenhouse gas emissions than conventional Chinese smelting plants. When the plant opens, the company will be the only supplier of battery-grade cobalt in North America.

Electra (then known as First Cobalt) published a feasibility study for restarting the First Cobalt refinery near the town of Cobalt in May 2020. The plant produced cobalt carbonate as well as nickel carbonate and silver precipitate between 1996 and 2015.

The plant is fully permitted. The study looked at spending US$55 million to bring it back into production at an expanded rate of 55 tonnes per day, significantly expanded from its original 12 tonnes per day capacity. The expanded plant would have an annual capacity of 25,000 tonnes of battery-grade cobalt sulphate.

As part of the expansion, Electra is adding a solvent extraction plant. Metso Outotec will supply the modular equipment and process control facility. The new plant will have a smaller footprint than conventional SX/EW equipment, and the mixer-settles will take 30% less time to install.

Glencore (LSE: GLEN) signed a five-year agreement to supply feed for the plant in 2019. It also provided US$5 million toward the feasibility study and agreed to provide US$40 million toward the cost of expansion and reopening. Glencore has the option to toll about 1,000 tonnes of cobalt-containing material at the plant, and Electra was granted an option to purchase an undisclosed amount of cobalt hydroxide feed material annually from Glencore.

The agreement with Glencore and a separate one with a subsidiary of China Molybdenum are expected to provide 90% of the feed for the refinery.

Electra signed an offtake agreement last year with metals trader Stratton Metals to purchase 100% of the cobalt sulphate from the refinery for five years.

Electra’s ultimate goal is to create a battery materials park in northern Ontario, with the support of the Canadian government. Such a facility will refine cobalt, nickel and black mass, converting them into precursor cathode active materials (PCAM) for lithium-ion batteries. This  approach is expected to lower raw material costs through economies of scale.