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Long.
Electra Provides Update on Refinery Project and Black Mass Economics; Launches Strategic Review Process
Thu, May 11, 2023 at 1:00 PM GMT+2
TORONTO, May 11, 2023--(BUSINESS WIRE)--Electra Battery Materials Corporation (NASDAQ: ELBM; TSX-V: ELBM) ("Electra" or the "Company") today released updated economics and capital spend estimates for its refinery complex currently under construction north of Toronto.
Pending completion, Electra’s refinery complex will be the first in North America to integrate the production of critical minerals, including cobalt sulfate and nickel sulfate, needed for the electric vehicle battery supply chain and the processing of black mass material designed to recover high value elements found in recycled lithium-ion batteries, including lithium, nickel, cobalt, manganese, graphite, and copper.
"Consistent with our recent disclosure, we completed a re-baseline engineering report to fully determine the impacts supply chain delays, inflationary price pressures, and scope changes have had on the capital budget required to complete our cobalt refinery project," said Trent Mell, CEO of Electra. "In tandem, we also completed a desktop scoping study to assess the potential economics to process black mass material from recycled lithium-ion batteries at our refinery complex.
"As expected, the capital spend requirements for completing our refinery project have risen beyond our initial forecasts due to higher material and labor costs, scope expansion, and supply chain disruptions over the past 18 months. Offsetting this development are the compelling economics identified by our desktop scoping study to build a permanent black mass processing operation, given its low capital intensity estimated at US$6 million and its high rate of internal return of more than 120%. Leveraging existing infrastructure, equipment, permits, and personnel, Electra can quickly transition from a plant-scale demonstration facility to a scalable, continuous battery recycling operation in 12 months from financing.
"Development of both studies marks a significant step towards the completion of our integrated refinery complex and reduces considerable uncertainty from our efforts to secure the remaining capital needed from various stakeholders. We can now accelerate our funding efforts with government, commercial, and strategic partners, and prioritize the processing of black mass material given the anticipated payback of less than two years and estimated EBITDA of US$10 million per year," Mr. Mell also said.
Black Mass Economics
Electra launched a black mass trial late in 2022 at its Ontario refinery complex to recover high-value elements found in shredded lithium-ion batteries. Using its proprietary hydrometallurgical process, Electra successfully completed the first plant-scale recycling of black mass material in North America and confirmed the recovery of a number of critical metals, including lithium, nickel, cobalt, copper, manganese, and graphite, needed for North America’s EV battery supply chain, surpassing initial expectations.
To date, Electra has produced quality nickel-cobalt mixed hydroxide, graphite, and lithium carbonate products in its black mass recycling trial. The Company expects to begin commercial shipments of product to customers in Q2 2023.
Electra completed an desktop scoping study to evaluate the potential economics of developing a standalone black mass process plant within its refinery complex capable of processing 2,500 tonnes of black mass material per annum. The Phase 1 facility could be scaled over time as the market for battery recycling expands.
Highlights from Electra’s desktop scoping study include:
Electra’s desktop scoping study was based on a number of assumptions, including annual processing of 2,500 tonnes of black mass, metal prices using analysts’ long-term forecasts, recovery rates consistent with those achieved to date, and US$9.2 million of committed capital comprised of US$5.9 million for capital costs and US$3.3 million in working capital.
At this time, black mass recycling capabilities remain at the evaluation stage and the decision to commercialize these capabilities remains subject to financing and additional engineering work to incorporate process modifications arising from the demonstration plant and the successful evaluation of samples by customers. Subject to these two conditions, expansion to 2,500 tonnes per annum could occur in 2024 pending the securing of financing for the project and installation of additional vessels and equipment within the existing footprint of the refinery complex being utilized for the black mass trial.
From an ESG perspective, Electra’s hydrometallurgical recycling plant is estimated to be five times less carbon intensive than a comparable production facility using a pyrometallurgical process with a similar electricity grid as found in China and four times lower than a similar facility in the state of Michigan.
Electra’s proprietary hydrometallurgical process produces less waste and enables the recovery of high value lithium and by-products that pyrometallurgical process cannot recover.
Refinery Project Capital Spend Update
Electra launched a project in June 2021 to expand and recommission an idled refinery capable of producing 5,000 tonnes of cobalt contained in cobalt sulfate per year. Electra’s refinery, which is located in Temiskaming Shores, Ontario, is a fully permitted facility with the capacity, once fully constructed, to expand to 6,500 tonnes of cobalt contained in cobalt sulfate per year.