Electra Battery Materials Corporation (ELBM-X) has signed a three-year supply agreement with Luxembourg miner Eurasian Resources Group to provide cobalt for Electra's Temiskaming Shores, Ont. refinery.

The binding letter of intent signed April 1 will have Eurasian Resources deliver 3,000 tonnes of cobalt per year starting in 2026. The metal will be sourced from Eurasian Resources’ facility in the Democratic Republic of the Congo.

Toronto-based Electra is building a battery park in northern Ontario planned to feature cobalt sulfate and nickel sulfate refineries, a lithium-ion battery recycling facility, and battery precursor materials production. Once fully commissioned, it could produce enough cobalt to meet production needs for 1.5 million electric vehicles per year, the company claims.

LG Energy Solution has agreed to a five-year off-take contract for up to 80 per cent of production from the site, and demand for the remaining production “far exceeds production capacity,” Electra said in a release.

“Partnering with a recognized leader in sustainable mining practices is essential for Electra to produce secure, clean, and ethically sourced battery materials,” Electra’s CEO Trent Mell said in the release.

Eurasian Resources, headquartered in Luxembourg, is a global miner with operations in Kazakhstan, Brazil and Central Africa.

Building its cobalt refinery

To complete construction of the battery park, Electra indicated it needs an additional $81.2 million. The company reports its replacement value has been pegged at approximately $270 million.

In February, Electra received a $5-million investment from the Canadian government for the Temiskaming Shores project.

The company has completed North America’s first plant-scale black mass recycling, where it processed 40 tonnes of black mass to generate nickel, cobalt and lithium.

The company claims the metal supply from Eurasian Resources will have a low carbon footprint because it is produced from historic tailings and production is powered primarily by hydroelectricity. To ensure responsible sourcing of the critical metal, Electra has joined the Responsible Minerals Assurance Process.

The cobalt production is to be compliant with the U.S. Inflation Reduction Act, which mandates critical minerals be sourced from certain countries to qualify for an electric vehicle tax credit.

Key to the agreement and Electra’s business is onshoring more critical minerals production outside of China. The Canadian government and allies such as the U.S. have prioritized bringing the critical minerals supply chain to their borders due to geopolitical instability and increased demand for the clean energy transition.

According to Electra, approximately 80 per cent of the cobalt market is in China.

“Electra was one of the first companies to achieve localization of the upstream supply chain, supporting the industry’s move towards an entirely integrated battery supply model and putting battery metals at the core of industry's related efforts,” Benedikt Sobotka, Eurasian Resources’ CEO, said in the release.

The deal between Electra and Eurasian Resources could also be expanded to include Electra’s plan for a second cobalt refinery in Bécancour, Que.