Electra Battery Materials Corp. [ELBM-TSXV; FTSSF-OTCQX] signed a five-year cobalt tolling contract and amended the previous concluded five-year cobalt hydroxide feed purchase agreement with Glencore Plc [GLEN-LSE, GLN-Jo’burg; GLCNF-OTC]. The company intends to produce a traceable, low-carbon battery-grade cobalt product for the electric vehicle market and the parties will market the Canadian-made cobalt sulphate as a premium brand product that is sustainably mined and refined with renewable hydroelectric power.
First production of battery-grade cobalt sulphate is anticipated in Q4 2022, with an annual production target of 5,000 tonnes of cobalt, subsequently increasing to nameplate capacity of 6,500 tonnes per year.
Glencore will have an option to toll approximately 1,000 tonnes of contained cobalt at Electra’s refinery and Electra will have an option to purchase an additional undisclosed quantity of cobalt hydroxide feed material from Glencore, each on an annual basis for a five-year term for refining at Electra’s Canadian refinery. The feed purchase agreement largely reflects the original cobalt hydroxide purchase agreement and is for the remaining quantities from the original contract that are not part of the tolling arrangement;
A third party life cycle assessment supports the view that Electra’s refinery will have the lowest carbon footprint in the global automotive supply chain, resulting in the world’s most sustainable cobalt for the electric vehicle market.
As part of its commitment to sustainable production, Electra intends to join the Fair Cobalt Alliance and adopt the Cobalt Institute’s Cobalt Industry Responsible Assessment Framework;
To date, Electra has concluded feed supply contracts with Glencore and IXM SA for a total for 4,500 tonnes of contained cobalt per year for a five-year term.
“Today’s announcement is a validation of our strategy by the world’s largest cobalt miner,” said Trent Mell, CEO. “We are very pleased to partner with Glencore as a means to establish our cobalt sulphate product as a premium brand in the EV market due to its traceability and low-carbon footprint.”
Glencore will use its extensive network to market Electra’s premium cobalt sulphate globally. The company previously concluded a five-year cobalt hydroxide feed purchase agreement with Glencore, which has been amended to reflect terms of the deal announced today. The tolling agreement will provide Glencore with the option to toll approximately 1,000 tonnes of contained cobalt through the refinery annually. The parties agreed to a tolling fee for the duration of the contract. Feed material will be provided from Glencore’s KCC mining operation. If exercised each year, the quantity of cobalt tolled with Glencore will represent 20% of the initial 5,000 tonnes per annum (tpa) production of the refinery, and 15% of the expanded 6,500 tpa production rate.
Electra is building North America’s only fully integrated, localized and environmentally sustainable battery materials park. Leveraging the company’s own mining assets and business partners, the Electra Battery Materials Park will host cobalt and nickel sulphate production plants, a large-scale lithium-ion battery recycling facility, and battery precursor materials production to serve North American and global customers.