Electra, Three Fires plan strategic partnership
First Nation investments entity, the Three Fires Group has signed on to become a strategic investor in Electra Battery Materials’ Temiskaming Shores batter materials park.
The investment is expected to form part of a larger financing by Electra totaling up to $20 million. It will help advance construction on the park and accelerate Electra’s battery recycling strategy in North America.
“Since announcing plans to form a battery recycling joint venture, we have had active discussions with Three Fires on how to best leverage our respective expertise and experiences to capitalize on the growing lithium-ion battery recycling market,” said Electra CEO Trent Mell. “Following a successful black mass recycling trial at our battery materials park in Temiskaming Shores, the strategic investment by Three Fires will help us to prioritize our focus and accelerate development of a permanent 2,500 tonne per annum recycling refinery, resulting in near-term cash flow at a low capital intensity while we continue to advance the cobalt sulfate refinery.”
Electra sees the resulting strategic relationship as an opportunity to position the company as a platform for greater participation by First Nations in the transition to a low-carbon economy, particularly relating to lithium-ion battery recycling.
“This would include participation at the board level and all levels of the organization, ensuring that Electra’s business strategy and ESG practices are aligned with the values and priorities of Canada’s First Nations,” Mell said.
Precise details of Three Fires’ strategic investment are expected to be confirmed following review and approval from its shareholder First Nation and funding sources, and consultations with the federal and provincial governments.
Under the terms of the proposed strategic investment, Three Fires would purchase shares. Electra would also grant Three Fires the right to nominate up to two members of Electra’s board of directors upon closing, and the right to participate in future equity offerings, including to maintain its pro rata percentage ownership in the company.
Completion of the strategic investment is also subject to Electra securing additional financing of $10 million. Electra and Three Fires are currently in discussions with various government and third-party stakeholders to secure at least $10 million of additional financing to advance Electra’s refinery project and battery recycling operations.
“We are excited for this opportunity as a strategic path forward in allaying our shareholder First Nation’s concerns around the rapidly growing EV battery manufacturing sector in southwestern Ontario,” said Three Fires CEO Phil Lee. “The region has announced billions of dollars of government and corporate investments in the past 10 months, but no announcements yet on how the critical end of life cycle portion of the value chain will be treated.”
Mr. Lee added, “What we desperately need is a clear plan to recycle the estimated 30 tonnes per day of EV battery manufacturing waste that is expected to be generated on our traditional lands. The Ministry of the Environment, Conservation and Parks estimates that all existing landfill capacity in the province will be exhausted in the next nine to 12 years. We are confident that our joint venture with Electra will provide a turn-key solution that is mutually beneficial for Canada, the Province of Ontario, First Nations, and industry partners such as VW and LG-Stellantis.”
“Our solution, which would cost approximately US$30 million to develop, includes the building of a primary recycling facility located in southern Ontario that will shred lithium-ion batteries, process battery scrap, and provide a steady supply of black mass to be refined by Electra at its refinery.”
Electra and Three Fires had previously announced plans to form a joint venture focused on the recycling of lithium-ion battery waste in Ontario supported by Electra’s propriety black mass processing capabilities that recover high value elements.
Under the joint venture, Electra and Three Fires will collaborate to source and process lithium-ion battery waste generated by manufacturers of current and future battery cells, electric vehicles, and energy storage systems.
The waste will be processed at a primary recycling facility to be located in southern Ontario to produce black mass material that will be further refined using Electra’s proprietary hydrometallurgical process at its refinery complex north of Toronto to recover high value elements, including lithium, nickel, cobalt, copper, manganese, and graphite. In addition to the black mass, the primary recycling facility will recover aluminum, copper and plastics, which will also be recycled.
The company’s refinery complex is located in northern Ontario, where the electricity grid mostly runs on renewable energy sources, making Electra a low carbon emitter. Combined with its hydrometallurgical process, Electra’s recycling plant is estimated to be five times less carbon intensive than a comparable plant using a pyrometallurgical process in a jurisdiction with an electricity grid similar to China’s.
Moreover, Electra’s process generates less waste and enables the recovery of lithium and other by-products that pyrometallurgical processes cannot recover.
Several electric vehicle facilities are moving forward across the treaty areas of the Three Fires Confederacy in southwestern Ontario, including recent announcements by the Volkswagen Group, LG-Stellantis, Toyota and GM CAMI.