Electra, Glencore cut new cobalt deals
Glencore to toll use of Ontario refinery, supply cobalt feed Metal Tech News - December 30, 2021
Last updated 1/18/2022 at 5:25am
Above and beyond its agreement to sell cobalt hydroxide feed material to Electra Battery Materials Corp., Glencore has signed a five-year tolling contract for the use of Electra's refinery in Ontario to upgrade additional cobalt hydroxide into battery-grade cobalt.
Glencore has been a strong supporter of Electra for a number of years, funding the initial engineering studies and providing technical input as the Canada-based company advanced development of its First Cobalt refinery.
This relationship between the world's largest cobalt miner and the emerging battery-grade cobalt producer included an agreement for Glencore to sell cobalt hydroxide to Electra, which would be upgraded to the cobalt sulfate that goes into the lithium-ion batteries powering electric vehicles.
Under a new five-year tolling and supply agreement, Glencore will have an option to toll approximately 1,000 metric tons of contained cobalt per year at the Ontario refinery, and Electra has the option to purchase additional cobalt hydroxide feedstock for the refinery. While much of the parameters of the supply agreement are similar to the previous deal with Glencore, Electra now has the option to determine the quantities it buys each year, providing enhanced flexibility to manage its feed sources.
The purchase price for the battery cobalt precursor material acquired from Glencore will continue to be linked to the prevailing market price of cobalt hydroxide.
Expected to be in production by the end of 2022, Electra's Ontario refinery will have an initial capacity to produce 5,000 metric tons of battery-grade cobalt per year and is slated to be ramped up to its 6,500-metric-ton-per-year nameplate capacity moving forward.
As such, Glencore's toll will account for roughly 20% of the initial and 15% of the expanded capacity.
With its supply agreement with Glencore and a separate deal with IXM SA, a Swiss metals merchant, Electra has secured enough responsibly produced feedstock to produce an additional 4,500 metric tons of battery cobalt per year.
With this feed, Electra intends to produce a traceable, low-carbon, battery-grade cobalt product for the electric vehicle market.
Both Glencore and Electra expect the battery-grade cobalt sulfate produced from sustainably mined feedstock and refined in a Canadian refinery powered with hydroelectricity will command a premium above normal market prices.
Positioned to benefit both as a feedstock supplier and as a tolling battery-grade cobalt producer, Glencore will use its extensive network to market Electra's premium cobalt sulfate globally.
"Today's announcement is a validation of our strategy by the world's largest cobalt miner," said Electra Battery Materials 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."
The startup of cobalt refining toward the end of 2022 is the first step in a four-phase plan to establish a battery park around the refinery that would produce battery-grade nickel sulfate and recycle lithium, nickel, cobalt, copper, and graphite from the black mass produced from recycled batteries.
Further information on Electra and its Ontario battery park plans can be read at Evolution of Electra Battery Materials in the November 10, 2021 edition of Metal Tech News, and details of the company's plans to recycle battery materials can be found at Electra to recycle battery metals in 2022 in the December 8, 2021 edition of Metal Tech News.