Electra, LG Energy Solution ink cobalt supply agreement
(Kitco News) - Electra Battery Materials (TSX-V: ELBM) today announced the signing of a three-year agreement to supply battery grade cobalt to LG Energy Solution (LGES), a leading global manufacturer of lithium-ion batteries for electric vehicles.
In its statement, Electra said it has agreed to supply LGES with 7,000 tonnes of battery grade cobalt from 2023 to 2025, adding that the material will be supplied from the only cobalt sulfate refinery in North America, located north of Toronto, Ontario.
Electra noted it will supply 1,000 tonnes of cobalt contained in a cobalt sulfate product in 2023 and a further 3,000 tonnes in each of 2024 and 2025 under an agreed pricing mechanism.
Importantly, the company said that cobalt sulfate provided under the term of the contract with LGES will be sufficient to supply up to 1.5 million full electric vehicles.
In addition to the supply agreement, Electra and LG Energy Solution have agreed to cooperate and explore ways to advance opportunities across North America's EV supply chain, including, but not limited to, securing of sustainable sources of raw materials.
"LG Energy Solution is a global leader in the electric vehicle supply chain, and we are delighted to sign our first strategic supply agreement with such an important player in the lithium-ion battery market," stated CEO Trent Mell. "This is only the beginning of a larger strategic relationship with LG Energy Solution involving our other assets and growth initiatives in the North American battery supply chain."
Electra's low-carbon hydrometallurgical refinery complex is located in Temiskaming Shores, near the Sudbury Nickel Basin. The refinery is in the late stages of commissioning and is expected to commence operations in the spring of 2023.
To meet growing customer demand, the company announced on June 22, 2022 that it is evaluating a second refinery in the province of Quebec by 2025-26, which could source cobalt from Electra's Idaho cobalt and copper project.
Currently commissioning North America's only cobalt sulfate refinery, Electra is executing a multipronged strategy focused on onshoring the electric vehicle supply chain.
Keys to its strategy are integrating black mass recycling and nickel sulfate production at Electra's refinery located north of Toronto, advancing Iron Creek, its cobalt-copper exploration-stage project in the Idaho Cobalt Belt, and expanding cobalt sulfate processing into Bécancour, Quebec.
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