Canada’s Fuse Cobalt has reached a memorandum of understanding (MOU) as a first step to supplying cobalt raw material to Electra Battery Materials in Canada.
Under the non-binding MoU, Fuse Cobalt will supply cobalt raw material to the Electra-owned cobalt sulfate refinery in Temiskaming Shores, Ontario.
The cobalt raw material is planned to be sourced from either one or both of the Fuse’s Teledyne and Glencore Bucke Cobalt exploration projects located in Cobalt, Ontario.
These two projects are located in close proximity to Electra’s cobalt refinery.
Fuse Cobalt said in a statement: “The transaction is expected to provide a ‘Made in North America’, low greenhouse gas emissions cobalt sulfate solution, capable of supplying the continent’s growing lithium-ion battery supply capacity.”
Fuse CEO Robert Setter said: “This MOU is the first step towards a potential Definitive Agreement to supply cobalt raw material for Electra’s nearby cobalt refinery and sets out the terms by which we will exchange information with Electra to advance a potential transaction involving the supply of cobalt raw materials.
“The end result of this collaboration will be the execution of a Definitive Agreement to provide cobalt feedstock to the Electra Cobalt Refinery, which is roughly a stone’s throw away from our two cobalt exploration properties in Ontario.”
The MoU is also expected to lay the framework for future transactions between the two Canadian companies.
These include Electra purchasing up to two kilo-tonnes per annum (KTA) of raw cobalt material from Fuse Cobalt’s ‘Glencore Bucke’ and/or ‘Teledyne’ operations for Electra’s cobalt camp refinery.
The two firms could also agree to jointly explore ways to extract copper by-product on a profit share basis.
Electra CEO Trent Mell said: “Having a domestic source of cobalt raw material produced ethically and with low-carbon emissions will help us to better address the demand for onshore EV battery materials.”
The transaction is subject to the two companies signing a definitive agreement, which will be subject to Fuse fulfilling some conditions.
Among these conditions include the development of a processing flowsheet to produce a cobalt material ideal for further processing to battery-grade cobalt sulphate at Electra’s refinery and the completion of a bankable feasibility study.