Nasdaq- and TSX-V-listed Electra Battery Materials has received a letter of intent (LoI) for C$20-million in proposed funding to support the completion of North America’s first battery-grade cobalt refinery. 

Once operational, the Ontario facility is expected to enable domestic production sufficient to power up to one-million electric vehicles (EVs) a year.

“We are grateful to be working with the government of Canada. Today’s announcement underscores their commitment to advancing North American energy security and critical mineral independence,” Electra CEO Trent Mell said on Friday. 

“Electra’s refining complex is a cornerstone of this collective effort, providing a strategically unique solution to strengthen and diversify the region’s critical minerals supply chain. By addressing domestic shortfalls and reducing reliance on China, where approximately 90% of the world’s cobalt is currently refined, we are fostering a more resilient, sustainable, and self-reliant future for North America.”

The facility, located in Temiskaming Shores, will be one of the few cobalt refineries in the world operating outside of China, positioning Electra as a key supplier in the North American battery materials market. Under an offtake agreement, LG Energy Solution has committed to purchasing up to 80% of Electra’s future cobalt production, while the remainder has already drawn significant buyer interest.

“With permits, infrastructure, and buildings in place, most equipment on site, and negotiations with the government of Canada reaching an advanced stage after more than a year of work, Electra intends to move swiftly to complete these discussions and resume construction of this strategic asset,” Mell said.

Canadian officials welcomed the development as part of the country’s broader push to establish itself as a global leader in critical minerals processing. “Canada has everything it takes to be a leading force in critical minerals processing, manufacturing, and recycling,” said Innovation, Science and Industry Minister Anita Anand. “Critical minerals are essential to power a low-carbon economy. I am interested in seeing how this develops, as Electra’s proposal may positively impact Canada’s critical minerals processing in Canada.”

The LoI, agreed upon on January 27, is nonbinding and does not constitute a formal agreement. It expresses an intent to finalise a term sheet, though there is no guarantee that final agreements will be reached or that funding will be secured.

Beyond cobalt refining, Electra is expanding its ambitions within the battery materials market. In 2023, the company successfully operated a plant-scale battery recycling demonstration, recovering lithium, nickel, cobalt, and other critical minerals from spent batteries. It has since launched a feasibility study for a dedicated battery recycling refinery adjacent to its cobalt refinery and is evaluating the development of a second cobalt sulphate facility in Bécancour, Quebec, as well as a North American nickel sulphate plant.

“Our Temiskaming Shores refinery complex is the first step in Electra’s vision,” Mell said. “We are building the right assets at the right time and are extremely well-positioned to leverage the refinery complex to grow along with the EV and battery markets.”