Electra Battery Materials Corporation (ELBM-X) plans to start commercial operations of its cobalt sulphate refinery in Northern Ontario near the end of 2027, a sign of more certainty for the critical minerals project.

Called North America’s first refinery of its kind by the Toronto-based company, early commissioning is expected in Q4 2026, followed by mechanical completion in Q2 2027. The start of production ramp-up is anticipated in Q3 2027, with commercial production in the last quarter of that year.

The refinery in Temiskaming Shores is expected to initially produce 5,120 tonnes of battery-grade cobalt sulphate per year, then grow to 6,500 tonnes per year by 2028. At full capacity, it is projected to supply enough material for one million electric vehicles.

As much of the world’s cobalt sulphate refining takes place in China – approximately 85 per cent according to a 2024 paper in Mineral Economics – countries like Canada have taken steps to onshore the production of critical minerals. Companies like Electra have key roles in this plan.

“Cobalt refining is a strategic capability for North America,” CEO Trent Mell said in the announcement of the schedule. By bringing the refinery into operation, Electra will be “strengthening allied supply chains and anchoring critical minerals partnerships within North America,” he continued.

Financing for construction approved

Electra’s board of directors approved a $73-million construction budget (all figures US) for the project. The company has arranged for approximately $82 million in financial support for the project — $48 million in government grants and loans and $34 million in equity financing, exceeding the approved construction budget.

In a display of the priority that governments have put on securing a domestic or friendly source of critical minerals, Electra said it secured funding commitments from the Canadian and Ontario governments plus the U.S. Department of Defense.

Progress on financing the project should be a relief to Electra, which delayed construction on the refinery in 2023 because of cost overruns from an increased scope, inflation and supply chain issues. The initial projection of capital costs was $76 million to $80 million, which leapt to a range of $110 million to $121 million.

Most of the major mechanical and electrical equipment for the refinery has been procured, Electra said. The engineering and organization of the project is also said to be “substantially advanced,” contributing to a clearer picture of the cost and schedule.

Supplying critical minerals

At the 5,120-tonne capacity, Electra expects to generate “meaningful” revenue from supplying cobalt sulphate supply to “North American and allied markets.”

Other than the electric vehicle industry, Electra has also indicated the defence, energy storage and grid infrastructure sectors as potential customers in a previous release.

If the facility is ramped up to 6,500 tonnes, it is expected to generate approximately five per cent of the world’s supply of cobalt sulphate. Excluding China, it is anticipated to account for 27 per cent of global supply.

Electra has signed feedstock supply arrangements with cobalt producers and trading counterparties such as Glencore. Additionally, the company entered into a long-term framework for processing raw material with LG Energy Solution, which is expected to account for approximately 60 per cent of initial production over the first five years of operations.

In early February, Electra announced it was searching for a permanent CFO with the pending departure of Marty Rendall, who has resign effective as of the end of the month. David Allen, who served as Electra’s CFO from 2023 to late 2024, plans to return in an interim role starting Feb. 28.