Ottawa commits $20M to Electra cobalt refinery in northern Ont.

Electra has signed a binding agreement with the federal government for $20M to help complete construction of a battery-grade cobalt sulfate refinery.

Electra Battery Materials has signed a binding agreement with the federal government for $20 million to help complete construction of North America’s only battery-grade cobalt sulfate refinery, located south of Temiskaming Shores.

The total cost of opening the refinery is projected to be $99.4 million. Once operational, it will play a vital role in the production of lithium-ion batteries in electric vehicles and other products.

The commitment announced May 4 is a follow-up to a March 2025 announcement about negotiations with Ottawa on an investment deal worth $20 million.

Following “extensive due diligence and discussions with the federal government,” the deal was signed on Monday. The government said the funding includes a combination of repayable and non-repayable contributions, bringing its total investment to $35 million since 2020.

“In the world in which we’re … going to be relying on lithium-ion batteries for various consumer products, but in particular for electric vehicles, we require this particular ingredient,” said Nipissing-Timiskaming Liberal MP Pauline Rochefort.

In 2024, the U.S. Department of Defence gave $20 million to kickstart refinery construction. Since then, however, American lawmakers have gotten cold feet on EVs.

The Trump administration has aggressively dismantled the Biden-era electric vehicle incentives, eliminating a $7,500 consumer tax credit and revoking emissions standards.

That has led to a stoppage of EV production at automotive plants and halting funding for national charging infrastructure.

But that’s not deterring the Canadian government from moving forward.

“In general, throughout the world, electric vehicles (are) the trend,” Rochefort added.

“We anticipate there’s going to be a substantial need.”

Last September, Nipissing MPP Vic Fedeli announced that the province would chip in $17.5 million for the refinery.

About 94 per cent of all the current supply of refined cobalt comes from China. Electra’s goal is to be one of the few producers with no ties to foreign entities.

“There’s only one other facility in the world outside of this one that can do what this one can do,” said Heather Smiles, Electra’s VP of investor relations and corporate development.

“This will be the first of its kind here in North America, and the only one producing cobalt sulfate here on the continent.”

Electra aims to begin production early next year. Mechanical completion of the facility is scheduled for the second quarter of 2027.

Once commissioned, the refinery will have an initial annual production capacity of about 5,120 tonnes of battery-grade cobalt in 2027, increasing to 6,500 tonnes over time.

The project, Smiles said, aligns with both Canadian and U.S. policy objectives to localize critical mineral processing and strengthen energy transition infrastructure.

Cobalt from the Congo

“Eventually, we may have the capacity to take additional feedstock from local projects as they come online,” Smiles said.

“For now, we’ll be bringing material in from very select companies in DRC. So, 80 per cent of the world’s cobalt comes from the Congo today.”

The company expects to employ 150 to 200 workers during construction and ramp-up, and about 60 permanent jobs during operations. In addition, it is expected to support 100 indirect jobs in the region, supporting long-term employment in northern Ontario.

Electra said it is prioritizing local sourcing and partnerships with Canadian contractors, helping to drive economic activity and strengthen the domestic battery materials supply chain.

“It’s really, really nice to see it getting really close to fruition and we’re really looking forward to working closely with Electra,” said Temiskaming Shores Mayor Jeff Laferriere.

A majority of production will be sold to LG Energy Solution of South Korea, under an offtake arrangement.