Electra and Eurasian Resources Group Sign Cobalt Supply Agreement
- Long-term cobalt supply agreement signed between Electra Battery Materials and Eurasian Resources Group to support North America's first battery grade cobalt sulfate refinery.
- ERG to deliver 3,000 tonnes per annum of IRA-compliant cobalt to Electra's refinery in Toronto starting from 2026.
- Partnership aims to onshore the battery supply chain and reduce reliance on foreign refiners, aligning with the US Inflation Reduction Act to promote domestic EV battery supply chains.
- Cobalt hydroxide feed material sourced from ERG's Metalkol operation in the DRC, meeting ethical and sustainable production standards.
- Electra's refinery complex in Toronto to integrate the production of critical minerals for the North American electric vehicle battery supply chain, with plans for further collaboration to de-risk construction of another cobalt refinery in Quebec.
- Electra's low carbon hydrometallurgical refinery in Canada permitted and requires an additional US$60 million to complete construction.
- None.
Insights
The agreement between Electra Battery Materials Corporation and Eurasian Resources Group (ERG) is a significant development within the battery materials industry, particularly in the context of the North American market. By securing a long-term supply of cobalt hydroxide, Electra is positioning itself advantageously to meet the growing demand for electric vehicle (EV) batteries. This move aligns with the strategic shift towards localizing the supply chain, a trend accelerated by legislative incentives such as the United States Inflation Reduction Act (IRA).
From a market perspective, this partnership could potentially alter the competitive landscape. Currently, China dominates the cobalt chemicals market, but Electra's initiative may pave the way for more regional autonomy in battery material production. The deal may also influence cobalt prices and availability, considering the DRC's substantial contribution to global cobalt production and ERG's commitment to ethical sourcing and a low carbon footprint.
Investors should note the potential for increased valuation of Electra due to this agreement. The company's strategic positioning and the IRA-compliant nature of its feedstock could attract further partnerships and investments, especially as North America intensifies efforts to develop a self-sufficient EV battery supply chain.
The supply agreement between Electra and ERG is noteworthy from an environmental and ethical standpoint. ERG's commitment to sustainable mining practices, including the production of cobalt from historic tailings using hydroelectric power, aligns with the growing consumer and investor interest in environmentally responsible and ethically sourced materials.
Furthermore, the emphasis on a low carbon footprint for cobalt production is crucial, as the EV industry is often scrutinized for the environmental impact of its supply chains. By partnering with a supplier that utilizes hydroelectric power and adheres to the Responsible Minerals Assurance Process (RMAP), Electra is reinforcing its commitment to sustainable practices, which could enhance its brand reputation and appeal to socially responsible investors.
It is also important to consider the long-term environmental benefits of localizing the supply chain. Reducing the distance between raw material sourcing and end-product manufacturing can decrease transportation emissions, contributing to the overall sustainability goals of the EV industry.
The financial implications of Electra's supply agreement with ERG are multifaceted. The partnership secures a critical input for Electra's refinery operations, which is expected to produce enough cobalt sulfate for up to 1.5 million EVs annually. This level of production capacity is significant in terms of revenue potential, particularly when considering the IRA's impact on EV credits and the consequent boost in demand for domestically sourced battery materials.
Electra's announcement of a prior offtake agreement with LG Energy Solution for a substantial portion of its production underscores the high demand for its output. The financial health of Electra may improve as it begins to capitalize on these agreements, although the company still requires an additional US$60 million to complete construction of its refinery. Investors should weigh the potential returns against the risks associated with the construction and operational ramp-up.
Additionally, Electra's efforts to de-risk the project through the acquisition of long lead equipment and the commissioning of a demonstration plant are positive indicators for financial stakeholders. These steps may mitigate some of the financial risks typically associated with scaling up production facilities.
Trent Mell & Benedikt Sobotka in February 2024 (Photo: Business Wire)
-
Starting from 2026, under the three-year supply agreement, ERG will deliver 3,000 tonnes per annum of IRA-compliant cobalt to Electra’s refinery north of
Toronto - With this agreement, Electra has sufficient cobalt hydroxide feed material to meet all of the refinery’s annual capacity
-
Cobalt will come from ERG’s Metalkol operation in the
Democratic Republic of the Congo , one of the largest cobalt hydroxide facilities globally -
Further collaboration is under consideration for Electra’s plans to build a second cobalt refinery in
Bécancour, Quebec
Under
“Partnering with a recognized leader in sustainable mining practices is essential for Electra to produce secure, clean, and ethically sourced battery materials,” said Electra’s CEO, Trent Mell. “Electra’s Canadian refinery is uniquely positioned as North America’s first cobalt sulfate refinery, with IRA-compliant feedstock to support growing EV demand. We are very proud to have ERG, one of the best cobalt hydroxide suppliers in the world, as a partner.”
“ERG is a responsible global player who supports the green energy transition. Electra was one of the first companies to achieve localisation of the upstream supply chain, supporting the industry’s move towards an entirely integrated battery supply model and putting battery metals at the core of industry's related efforts,” said Benedikt Sobotka, ERG’s CEO and Co-Chair of the Global Battery Alliance. “Supplying ethically produced cobalt hydroxide to Electra meets our values and supports North America’s cobalt demand, as well as the region’s rapidly expanding battery supply chain.”
ERG’s cobalt hydroxide is an intermediate product from mining operations and is the preferred feedstock for refining a battery grade cobalt sulfate product.
The DRC represents approximately
Electra previously announced a five-year offtake agreement with LG Energy Solution for up to
Electra’s refinery complex, when completed, aims to be the first in
Once fully commissioned, the refinery could produce sufficient cobalt for up to 1.5 million electric vehicles annually.
Electra’s low carbon hydrometallurgical refinery in
About Electra Battery Materials
Electra is a processor of low-carbon, ethically-sourced battery materials. Currently focused on developing North America’s only cobalt sulfate refinery and a black mass refinery, Electra is executing a multipronged strategy to onshore the electric vehicle supply chain. Keys to its strategy are integrating black mass recycling and nickel sulfate production at Electra’s cobalt refinery located north of
About Eurasian Resources Group
Eurasian Resources Group (ERG) is a leading diversified natural resources group headquartered in Luxembourg with integrated mining, processing, energy, logistics, and marketing operations. The Group operates in almost 20 countries and is a major employer in the industry with over 80,000 employees and contractors.
ERG is one of the world’s largest producers of cobalt and ferrochrome. It is also a large global supplier of copper and high-grade iron ore. In Eurasia, it is one of the major suppliers of alumina and is Kazakhstan’s only producer of high-grade aluminium.
In
ERG is a founding member of the Global Battery Alliance (GBA), hosted originally on the platform of the World Economic Forum. The GBA is dedicated to ensuring an ethical and sustainable global supply chain for the lithium-ion batteries that can power the Fourth Industrial Revolution and a low carbon economy through electric vehicles, renewable energy technologies and smartphones. Since its establishment in 2017, the GBA has grown to include more than 150 leading businesses and international organisations as members, becoming the world’s largest multi-stakeholder consortium in the energy storage space. In 2023, GBA has launched the world’s first Battery Passport.
ERG champions the WEF Securing Minerals for the Energy Transition (SMET) initiative, which aims to secure a reliable supply of the critical minerals vital for decarbonisation.
The Group has also become one of the first 25 organisations globally to support the @Sustainable Markets Initiative’s ‘Terra Carta’, launched by King Charles III (while he was Prince of Wales), which provides a roadmap for a sustainable future by 2030.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements
This news release may contain forward-looking statements and forward-looking information (together, “forward-looking statements”) within the meaning of applicable securities laws and the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, are forward-looking statements. Generally, forward-looking statements can be identified by the use of terminology such as “plans”, “expects”, “estimates”, “intends”, “anticipates”, “believes” or variations of such words, or statements that certain actions, events or results “may”, “could”, “would”, “might”, “occur” or “be achieved”. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results, performance, and opportunities to differ materially from those implied by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements are set forth in the management discussion and analysis and other disclosures of risk factors for Electra Battery Materials Corporation, filed on SEDAR at www.sedar.com and with on EDGAR at www.sec.gov. Other factors that could cause actual results to differ materially include changes with respect to government or investor expectations or actions as compared to communicated intentions, and general macroeconomic and other trends that can affect levels of government or private investment. Although the Company believes that the information and assumptions used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed times frames or at all. Except where required by applicable law, the Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240402063227/en/
Heather Smiles
Vice President, Investor Relations & Corporate Development
Electra Battery Materials
Info@ElectraBMC.com
1.416.900.3891
Andrey Belov
Group Senior Manager – PR and Communications
Eurasian Resources Group, Luxembourg
press@erg.net
www.eurasianresources.lu
Source: Electra Battery Materials Corporation
FAQ
What is the ticker symbol for Electra Battery Materials ?
Who is the CEO of Electra Battery Materials ?
What is the agreement between Electra and Eurasian Resources Group about?
Where will the cobalt come from for Electra's refinery?
What is the purpose of the partnership between Electra and ERG?
What is Electra's CEO, Trent Mell, emphasizing in the press release?
What does ERG's CEO, Benedikt Sobotka, highlight in the press release?
