Eurasian Resources Group (ERG) has signed an agreement with the Canadian Electra Battery Materials Corporation to supply its Toronto plant with cobalt hydroxide which Electra is going to use as material for cobalt sulfate production, a key element for electric vehicle batteries.
The start of the supply of 3,000 tons of cobalt to the Electra plant is scheduled for 2026. Under the three-year contract, ERG will supply cobalt from its ERG Metalkol manufacturing site in the Democratic Republic of the Congo.
As of today, Congo accounts for about 75% of global cobalt production. Most of this raw material is processed in China, which controls roughly 80% of the cobalt chemicals market.
At the same time, the U.S. government is revoking its $7,500 subsidies for electric vehicles made from materials produced by businesses of concern. This is why many producers in the U.S. and Canada are so eager to process cobalt on their own to ensure their supply chain for electric car batteries is robust. Following this logic, Electra is constructing its first cobalt sulfate plant in North America.
The company has already invested $200 million in the construction of the facility and needs an additional $60 million to complete the process. Once it is fully operational, it will be able to produce enough cobalt to produce about 1.5 million electric vehicles per year.
Furthermore, ERG and Electra are going to proceed with their cooperation as Electra plans to build a second cobalt processing plant in Quebec. The Canadian company has already signed a five-year agreement with LG Energy Solution to supply them with up to 80% of its products. Given that the demand for remaining cobalt products is huge, the Toronto plant will likely face shortages in its capacity. Therefore, the company is already considering future expansion of the factory.
According to Bloomberg, authorities of the Democratic Republic of the Congo could suspend the operation of nine subcontracting companies working at ERG mines as they aren’t controlled by the country’s citizens, which contradicts the law. This news became another sign of rising tensions between ERG and this African country.
The ultimate beneficiaries of ERG are the Ministry of Finance of Kazakhstan (40%), Alexander Mashkevich (20.7%), the Ibragimov family (20.7%) and Patokh Shodiev (18.6%).
