Electra forms black mass JV

Canada’s Nasdaq-listed Electra Battery Materials has formed the Aki Battery Recycling joint venture with indigenous-owned Three Fires Group to produce battery black mass through recycling of lithium-ion battery scrap and waste material.

The black mass would then be sold to Electra’s refinery to recover lithium, nickel, cobalt and other critical minerals to produce new lithium-ion batteries.

Under the JV, Electra and Three Fires will collaborate to source and process lithium-ion battery waste from manufacturers to produce black mass at a new facility to be established in southern Ontario. The black mass will then be further treated using Electra’s proprietary process at its Ontario hydrometallurgical refinery to recover critical minerals that can be reintroduced into the battery supply chain.

By recovering lithium, nickel, cobalt, copper, manganese and graphite through an advanced battery shredding process, the JV promises to reduce the carbon footprint of the EV supply chain and decrease reliance on foreign countries for critical minerals.

Three Fires is an indigenous-owned economic development agency. It will lead the capital resourcing of the joint venture, as well as sourcing and determining the location for the future facility. Electra will provide technical and commercial leadership to the project.

“I am grateful for the relationship we have built with Three Fires over the past year. Aki Battery Recycling aims to address the environmental impact of future battery waste in Ontario and beyond, by returning battery scrap back into the supply chain,” says Electra CEO Trent Mell. “This venture not only aligns with our mission to onshore North America’s EV battery supply chain, but to do so sustainably and through a scalable solution to meet the growing needs of the North American electric vehicle industry.”

“We are excited to partner with Electra’s industry-leading hydrometallurgical capabilities to address the growing challenge of battery waste,” says Reggie George, executive director special projects and partnerships at Three Fires. “Aki Battery Recycling will provide a full-circle solution including a new primary recycling facility located in southern Ontario to shred lithium-ion batteries, process the scrap, and provide a steady supply of black mass, which will then be refined by Electra at its refinery complex.

“With the billions of dollars being invested into the southern Ontario battery manufacturing industry, ensuring that valuable materials are recovered and reused in Ontario, rather than discarded, is central to our shareholder First Nations’ interests. This initiative not only underscores our dedication to environmental stewardship but also enhances the circular economy in the battery industry.”

Several EV facilities are moving forward across the treaty areas of the Three Fires Confederacy in southwestern Ontario.

In 2023, Electra processed 40t of black mass at its refining complex north of Toronto to trial its proprietary recycling process. The programme is believed to have been the first plant-scale hydrometallurgical recycling of black mass material in North America, as well as the first domestic production of nickel-cobalt mixed hydroxide precipitate (MHP). Electra successfully recovered MHP, lithium carbonate, graphite and other commercial products.

In June, the firm received C$5mn ($3.7mn) from the Natural Resources Canada government ministry to accelerate the next phase of its recycling project, to demonstrate on a continuous basis that the company’s hydrometallurgical black mass process is scalable, profitable, and can be implemented at other locations.

Electra’s current main focus is developing a cobalt sulphate refinery north of Toronto. But its longer-term strategy includes integrating black mass recycling, potential cobalt sulphate processing in Becancour, Quebec, and exploring nickel sulphate production potential within North America.

Funding boost

In early September, Electra made progress in financing the cobalt sulphate refinery when it received a non-binding term sheet for a $20mn prepayment facility from an arms-length strategic player in the battery materials sector. Then firm is trying to raise the last $60mn — for project completion plus amounts for working capital and operations during the construction and commissioning phases — of the $250mn refinery project

"Interest from sophisticated strategic partners indicates strong confidence in Electra, and with the continued support of investors, governments and downstream customers, we are well-positioned to realize our vision of a North American battery materials supply chain," Mell said in mid-September.

The strategic investment is equal to a $20mn award Electra received from the US Department of Defense in August.

If consummated, the new investment would comprise of an immediate investment of $10mn and a follow-on investment of $10mn during the refinery’s commissioning phase. As partial compensation, Electra would provide marketing rights for a portion of future production until the facility is repaid.

Electra says it continues to make “steady progress” in securing other non-dilutive sources of financing, including government programmes, to complete the construction and commissioning of the refinery. Once fully commissioned, Electra’s facility could produce up to 6,500t/yr of cobalt, which could support the production of over 1mn EVs annually. South Korea’s LG Energy Solution intends to purchase up to 80pc of capacity over the first five years of operation.

Share price setback

But it has not all been good news for the fledgling form. Earlier this week, it received notice from Nasdaq of noncompliance with the minimum bid price requirement of $1/share and that subsequently the shares of the company are subject to delisting.

Electra intends to submit an appeal. But it already secured an extension in March, giving it the deadline of 16 September which it has now missed.

“We value the exposure to the US market that our Nasdaq listing provides Electra, and we intend to explore all available options to preserve this listing,” says Heather Smiles, vice-president, investor relations & corporate development at the firm.

If the appeal is successful, the company expects to receive additional time in which to regain compliance with minimum bid requirements. But it cautions that there are no assurances either that the appeal will succeed or that the company’s share price will regain compliance. The listing of Electra shares on Canada’s TSX Venture exchange is not impacted by Nasdaq’s decision.

In April, Electra signed what it touts as as an 'IRA-compliant' cobalt supply deal with miner Eurasian Resources Group.