Wedoany.com Report on Feb 24th, Electra Battery Materials Corporation announced that its board of directors has approved a $73 million construction budget and established an execution schedule to advance the mechanical completion of the cobalt sulfate refinery located north of Toronto, marking a critical step towards the operation of North America's first battery-grade cobalt refinery. Commissioning activities are expected to commence in Q4 2026, with mechanical completion scheduled for Q2 2027, followed by ramp-up and commercial production targeted for Q3 and Q4 2027, respectively.
CEO Trent Mell stated, "Our mandate is clear. We are advancing the completion of this refinery with a defined budget, schedule, and execution plan. This is a brownfield industrial asset with all necessary permits, significant installed infrastructure, and funding commitments from allied governments. With major equipment procured and the construction sequence defined and established, we are ready to move from restart to full execution." The approved budget, based on updated engineering designs, contractor input, and market pricing, will fund remaining construction activities, with some commissioning potentially starting before mechanical completion.
Most major mechanical and electrical equipment has been procured, and long-lead materials have arrived on site, reducing supply chain risks. Engineering and construction sequencing is largely complete, enhancing cost and schedule certainty. Key construction milestones include awarding the SMPEI contract in Q1 2026, full site mobilization in Q2 2026, early commissioning in Q4 2026, mechanical completion in Q2 2027, ramp-up in Q3 2027, and commercial production in Q4 2027.
Electra has arranged approximately $82 million in financial support, including $48 million in government grants and loans and $34 million in equity financing, exceeding the construction budget. The refinery has secured funding commitments from the U.S. Department of Defense, the Canadian government, and the Ontario government, highlighting its strategic importance to North America's critical mineral supply chain. The company is negotiating amendments to its credit facility terms with lenders to support up to $27 million in debt financing, though the outcome is uncertain. Commissioning and start-up costs are estimated at approximately CAD $15 million, to be managed through liquidity and working capital facilities.
The refinery is initially designed to produce 5,120 tonnes per annum (tpa) of battery-grade cobalt sulfate, with its crystallizer circuit rated at 6,500 tpa, allowing for a potential ~27% production increase. Electra aims to optimize output to 6,500 tpa by 2028. Engineering studies to evaluate expansion will be completed during commissioning, incorporating performance data and operational experience. Cobalt sulfate prices have approximately doubled over the past 12 months, reflecting tighter supply discipline and growing demand. The lithium-ion battery industry continues to expand, with 2025 year-over-year growth estimated at 29%, reaching approximately 1.59 TWh, with around 75% of demand coming from the 20.7 million electric vehicles sold globally.
In December 2025, the U.S. and the Democratic Republic of the Congo signed a critical minerals cooperation agreement, emphasizing the importance of secure and diversified cobalt supply chains. U.S. Advanced Manufacturing Production Tax Credit guidelines have increased scrutiny on upstream sourcing, enhancing the role of traceable allied materials in maintaining eligibility. Electra's North American refining platform can provide traceable, non-EFP upstream inputs, supporting customer credit eligibility. Industry estimates project global cobalt demand to increase by approximately 8.9 kt in 2025 and a further 9.2 kt in 2026, with more demand expected to be met outside China, reflecting diversification strategies.
At its maximum capacity of 6,500 tpa, Electra's refinery is projected to account for approximately 27% of global supply (excluding China) and about 5% of total global cobalt sulfate supply. The company maintains supply agreements with major global cobalt producers like Glencore and has a long-term offtake agreement with LG Energy Solution, expected to cover approximately 60% of initial production. Construction will be executed under an integrated management framework led by EXP, providing integrated oversight and cost control. Restart activities began in Q4 2025, focusing on initial engineering and site preparation, with the SMPEI contract expected to be awarded in Q1 2026.
The refinery is a brownfield site with all necessary permits and retains existing infrastructure. Construction activities from 2022 to 2023 included site infrastructure and structural work. During the project pause, the company operated parts of the facility to validate process circuits. Since Q4 2025, preparatory work such as installing pipe racks, clarifier tanks, and updating energy infrastructure has been completed. Long-lead equipment is in place, construction sequencing is near completion, and project controls have been implemented. Electra believes that once operational, the refinery will be North America's only battery-grade cobalt sulfate production facility, addressing a regional supply chain gap, as global battery-grade cobalt refining capacity is highly concentrated in Asia. Establishing domestic refining capacity in Canada supports allied supply chains, reduces reliance on foreign processing, and enhances the resilience of critical mineral supply.
Mell noted, "Cobalt refining is a strategic capability for North America. By bringing this plant into operation in 2027, we will establish the region's only battery-grade cobalt sulfate production capacity, strengthen allied supply chains, and solidify North America's strategic alliance on minerals. The U.S. and allied governments have intensified cooperation with producing nations to advance secure, responsible cobalt supply chains. This refinery provides the necessary midstream capability to transform upstream resource alliances into domestic cobalt supply for the North American market."
