Electra signs five-year cobalt tolling deal with Glencore

Electra has reached an agreement with Glencore in which the latter will have the option to toll 1,000 mt/year of contained cobalt at the former's Ontario refinery over a five-year period, the companies said Dec. 30.

"Today's announcement is a validation of our strategy by the world's largest cobalt miner," Electra CEO Trent Mell said in a statement. "We are very pleased to partner with Glencore as a means to establish our cobalt sulfate product as a premium brand in the electric vehicle market due to its traceability and low carbon footprint."

Under the arrangement, Glencore will supply Electra with cobalt hydroxide mined at the former's Africa-based operations, and Electra will refine the feedstock into cobalt sulfate. The refined cobalt subject to the tolling deal will then be marketed globally by Glencore.

"Both Glencore and Electra expect the battery-grade cobalt sulfate produced at the Canadian refinery to command a premium above normal market prices," the companies said. "The collaborative approach will help to properly position Electra's cobalt sulfate in the market."

Toronto-based Electra plans to begin battery-grade cobalt sulfate production at its refinery by the end of 2022 at an initial capacity of 5,000 mt/year of contained cobalt. Subsequent phases of development will lift the plant's nameplate capacity to 6,500 mt/year.

The battery metals refiner currently has five-year cobalt hydroxide feed arrangements with Glencore and China Molybdenum subsidiary IXM that cover a combined 4,500 mt/year of contained cobalt supply. Both deals begin in the fourth quarter of 2022.

However, with the new tolling deal in place, Electra and Glencore have agreed to slightly modify their existing supply feed agreement. The refiner will now have the option to purchase an additional undisclosed quantity of cobalt hydroxide feed material from Glencore on an annual basis for a five-year term, according to the statement.