Electra partners with Glencore, Talon and Ontario government on battery materials park study

Electra Battery Materials (TSXV: ELBM; US-OTC: ELBMF) is partnering with Glencore (LSE: GLEN), Talon Metals (TSX: TLO) and the Government of Ontario to assess the potential of creating a battery materials park in northern Ontario.

The consortium will collaborate on a joint study to assess technical, financial and permitting requirements related to the construction of a battery grade nickel sulfate plant and a battery precursor cathode active materials (PCAM) plant.

The project would prioritize using low carbon raw materials from domestic sources, and the new plants would be situated adjacent to Electra’s current cobalt refinery and recycling facility, near the town of Cobalt.

The cost of the study is pegged at $700,000, of which the provincial government would contribute $250,000, a sum to be matched by Electra. Glencore and Talon would each kick in $100,000. It is anticipated that the study will be completed in phases, with results expected in the second half of this year.

If the consortium decides to proceed with the project, it would be North America’s first integrated, localized and environmentally sustainable battery materials park to service the burgeoning electric vehicle (EV) market.

The concept currently envisioned is to co-locate chemical refining and PCAM production on a common site, eliminating conventional processing steps. This could result in lower unit costs, a shortened supply chain and a smaller carbon footprint for the facilities.

The proposed battery materials park would be located two hours north of the Sudbury Basin, one of the largest sources of nickel in the world, and where Glencore has its Integrated Nickel Operations (INO). Talon is developing its high-grade Tamarack nickel-copper-cobalt project in central Minnesota, a joint venture with Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO).

Electra’s business strategy is to produce enough material to supply 1.5 million EV batteries on an annual basis. To achieve this, the company plans to pursue a four-phased approach that would see the building of the first battery materials park on the continent, with an ambitious timeline the consortium’s study could help expedite.

The first part of this approach would see Electra complete construction of its $84 million battery grade refinery, which the company says remains on budget and on schedule for commissioning in December of this year. The second phase would see a battery recycling circuit scheduled for 2023, followed by the battery grade nickel sulfate and PCAM plants sometime mid-decade.

“Ontario is home to North America’s only battery grade cobalt refinery, an abundance of nickel and clean hydroelectric power,” Electra’s CEO, Trent Mell, said in a news release. “Together we can leverage Electra’s existing footprint and the Government of Ontario’s ambitions to build a world class battery supply chain in the province.”

The relatively modest investment in the study by Glencore adds to the company’s increasing profile in the green energy sector. Earlier in February, the mining giant invested US$54 million in U.K.-based EV battery start-up Britishvolt, which wants to build a 10,000-tonne-per-year battery recycling gigafactory in England. Meanwhile, Talon signed a deal with Tesla in January that would see it provide the EV maker with 75,000 tonnes of nickel concentrate from its Tamarack project.

At presstime, Electra’s shares were trading in Toronto at 27.5¢ within a 52-week ranges of 25.5¢ and 42.5¢. The company has 534 million common shares outstanding for a market cap of just $153 million.