US Government Invests $20 Million in Canadian Cobalt Refinery
The US Department of Defense has awarded $20 million to Canada’s Electra Battery Materials Corp. (Nasdaq: ELBM; TSX-V: ELBM). The funding, provided under Title III of the Defense Production Act, will support the construction of North America’s only cobalt sulfate refinery in Temiskaming Shores, Ontario.
The $250 million facility, located about 500 kilometers north of Toronto, aims to produce 6,500 tonnes of cobalt annually, enough to support the production of over 1 million electric vehicles per year. This investment is part of a broader U.S. strategy to secure critical materials for EV manufacturing and reduce reliance on Chinese processing facilities, which currently dominate the global market.
Electra CEO Trent Mell highlighted the importance of government support in building a domestic supply chain, citing challenges posed by Chinese subsidies and overproduction.
“We’re not in a free market, with China subsidizing producers and overproducing,” Mell said in an interview. “I think it’s essential that, if we’re going to build our own domestic supply chain, we have this financial support.”
The refinery project is expected to have the lowest carbon footprint globally and will source ethically-produced cobalt from mines in the Democratic Republic of Congo. LG Energy Solution has agreed to purchase up to 80% of the facility’s output for the first five years.
Beyond cobalt production, Electra plans to expand its operations to include other battery materials, including a black mass recycling plant and potential nickel sulfate production. These initiatives align with the US government’s goal of strengthening North American battery supply chains and reducing dependence on foreign manufacturing.
The company, which paused construction last year due to low cobalt prices, is also in talks with the Canadian government for additional funding.
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