U.S. DoD Invests $20 Million In Canadian Cobalt Refinery To Strengthen EV Battery Supply Chain

In a move to strengthen North America’s electric vehicle (EV) battery supply chain, the United States Department of Defense (DoD) has awarded $20 million to Electra Battery Materials Corporation, a Canadian company, to help expand its cobalt refinery in Ontario.

According to the DoD, the investment, which comes from the Ukraine Supplemental Appropriations Act of 2022, is part of its efforts to increase domestic production of critical minerals and support the 2024 National Defense Industrial Strategy. By helping Electra complete its Ontario Cobalt Refinery, the DoD aims to establish the first North American facility capable of producing commercial-scale quantities of cobalt sulfate, a key material used in lithium-ion batteries.

“This award will develop North American production of a key precursor material for large capacity batteries, helping to create a more robust industrial base capable of meeting growing demand across both the defense and commercial sectors,” stated Dr. Laura Taylor-Kale, Assistant Secretary of Defense for Industrial Base Policy.

This strategic move reflects the growing importance of securing reliable supplies of critical minerals, especially as the global EV market continues to expand rapidly. Canada has emerged as a key partner in this effort, with the country quickly becoming a hub for EV raw material production and processing.

Honorable Jonathan Wilkinson, Minister of Energy and Natural Resources Canada, expressed the opportunity for Canada stating, “From mining responsibly sourced critical minerals, to processing them here in North America, to building batteries for electric vehicles and other key technologies, and eventually to recycling them, there is enormous opportunity for both Canada and the United States from both an economic and a security perspective.”

As for Electra, it is a Toronto-based battery materials producer that started recommissioning and expanding its cobalt refinery in Temiskaming Shores, Ontario, Canada in 2021. However, the project faced some challenges, including cost overruns and equipment delivery issues, forcing the company to pause construction earlier this year.

As a result, the DoD’s $20 million investment will help Electra restart construction and establish the refinery’s production capabilities. Once operational, the plant is projected to produce 6,500 tonnes of cobalt sulfate annually, enough to support the production of around one million EVs.

“On issues of national security, there are no borders between Canada and the United States. We are proud to partner with the U.S. government to build a strong North American supply chain for critical minerals,” stated Trent Mell, CEO of Electra Battery Materials.

The DoD’s investment in Electra’s Ontario facility is the latest in a series of moves by the U.S. government to bolster the domestic critical minerals supply chain. Earlier this year, the DoD also awarded funding to other Canadian mining companies including Lomiko Metals and Fortune Minerals, as part of its efforts to diversify and secure access to these vital resources.

As the global transition to electric mobility accelerates, the collaboration between the U.S. and Canada on critical mineral supply chains will be crucial in ensuring the long-term competitiveness and sustainability of the North American EV industry.

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