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(Kitco News) – Electra Battery Materials (TSX-V: ELBM) announced Thursday it has signed a five-year cobalt tolling contract and amended the previous concluded five-year cobalt hydroxide feed purchase agreement with Glencore.
The company said it 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 sulfate as a premium brand product that is sustainably mined and refined with renewable hydroelectric power.
First production of battery grade cobalt sulfate is anticipated in Q4 2022, with an annual production target of 5,000 tonnes of cobalt, subsequently increasing to nameplate capacity of 6,500 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.
“Today’s announcement is a validation of our strategy by the world’s largest cobalt miner,” said CEO Trent Mell. “We are very pleased to partner with Glencore as a means to establish our cobalt sulfate product as a premium brand in the EV market due to its traceability and low carbon footprint.”
Importantly, the company said that Glencore will use its extensive network to market Electra’s premium cobalt sulfate globally.
“Both Glencore and Electra expect the battery-grade cobalt sulfate produced at the Canadian refinery to command a premium above normal market prices. The collaborative approach will help to properly position Electra’s cobalt sulfate in the market,” Electra noted in a statement.
Electra is building North America’s only fully integrated, localized and environmentally sustainable battery materials park. The Electra battery materials park will host cobalt and nickel sulfate production plants, a large-scale lithium-ion battery recycling facility, and battery precursor materials production, which will serve both North American and global customers. Electra also owns the advanced exploration-stage Iron Creek cobalt-copper project in Idaho, USA.