Electra Battery Materials Corp. agreed to buy cobalt produced in the Democratic Republic of Congo to feed a refinery the company is building in Canada.
The Toronto-based firm, part of North America’s dash to expand its capacity to process the minerals key to electric vehicles and the wider energy transition, signed a binding letter of intent with Eurasian Resources Group Sarl, according to a statement Tuesday. ERG will supply 3,000 tons of cobalt hydroxide annually starting in 2026 under the three-year deal, Electra said.
The U.S. and Canada are among the countries trying to reduce their dependence on China, which dominates the market for refining minerals such as cobalt, lithium and rare earths. The Biden administration’s Inflation Reduction Act, known as the IRA, offers billions of dollars in financial incentives to boost manufacturing of EVs and batteries.
Cobalt from ERG’s Metalkol project in southeastern Congo is intended to supply a plant Electra is developing north of Toronto. Battery materials made in Canada, such as the cobalt sulfate that will be produced by Electra, qualify for IRA benefits.
“Electra’s Canadian refinery is uniquely positioned as North America’s first cobalt sulfate refinery, with IRA-compliant feedstock to support growing EV demand,” Chief Executive Officer Trent Mell said in the statement. Once commissioned, the plant may produce enough cobalt for as many as 1.5 million vehicles a year.
The U.S. legislation has created an uncertain situation for Congo, which supplied more than three-quarters of the world’s cobalt last year, as it lacks the relevant trade agreements for eligibility.
In October, ERG agreed to provide cobalt from Metalkol to EVelution Energy LLC, an Arizona-based battery materials processor backed by commodities trader Trafigura Group.
In January, ERG said it was in talks about building a cobalt sulfate refinery in Saudi Arabia.
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