DOD awards Electra $20M for cobalt sulfate production

Electra Battery Materials Corp., Toronto, has been awarded $20 million by the U.S. Department of Defense to support the construction and commissioning of a cobalt sulfate refinery capable of producing battery-grade materials for lithium-ion batteries (LIBs). The company says, currently, more than 80 percent of battery-grade cobalt is produced in China.

The award was made pursuant to Title III of the Defense Production Act (DPA) to expand domestic production capability and is funded through the Additional Ukraine Supplemental Appropriations Act. In June, Canada announced its own $5 million Canadian ($3.6 million U.S.) award to Electra to advance the next phase of a battery materials recycling project started at the same refinery facility.

RELATED: Electra awarded $5M from Canadian government

“Electra is committed to strengthening the resiliency of the North American battery supply chain,” CEO Trent Mell says. “We are grateful to the U.S. Department of Defense for its support. On issues of national security, there are no borders between Canada and the United States. We are proud to partner with the U.S. government to build a strong North American supply chain for critical minerals.”

The $250 million refinery project is located north of Toronto, in Temiskaming Shores, Ontario, and Electra says it is projected to have the lowest carbon footprint in the world. The company is expanding an existing plant, with permits in hand, construction underway and most long-lead custom equipment already on-site.

Once fully commissioned, Electra says the facility will be able to produce 6,500 tons of cobalt per year, which would support the production of more than 1 million electric vehicles (EVs) annually. LG Energy Solutions will purchase up to 80 percent of capacity over the first five years, and several buyers are competing for the remaining production. Electra says the cobalt feed material will be “ethically sourced” from Glencore and Eurasian Resources Group mines in the Democratic Republic of the Congo (DRC)—material that otherwise would be shipped to China.

“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 defense and commercial sectors,” says Laura Taylor-Kale, assistant secretary of defense for industrial base policy.

According to the DOD, this is the latest of 35 awards made by the DPAI program across multiple areas totaling $445 million since the beginning of fiscal year 2024. This also is the latest of three awards made to Canadian companies using DPA funds to execute projects based in Canada. The DPAI is overseen by the ASD(IBP)’s Manufacturing Capability Expansion and Investment Prioritization (MCEIP) program, in the Office of the Deputy Assistant Secretary of Defense for Industrial Base Resilience.

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 plant at its refinery complex, recovering lithium, nickel, cobalt and other critical minerals from batteries. Electra says it also is considering a second cobalt sulfate facility in Bécancour, Quebec, and a strategically located North American nickel sulfate plant.