TORONTO — Canada’s First Cobalt Corp said on Wednesday it has secured $10 million in government loans and grants, allowing it to accelerate startup and expansion of North America’s first cobalt refinery.
Cobalt is crucial for the lithium-ion batteries used in the fast-growing electric vehicle sector, and the financial backing is the latest bet on the burgeoning industry by the Ontario and Canadian governments.
First Cobalt’s cobalt refinery in Ontario could also ease North America reliance on China, which dominates the supply chain for rechargeable lithium-ion batteries.
Under Wednesday’s deal, Canada will provide a $5 million interest-free loan to First Cobalt while the Ontario government will give the company a $5 million non-repayable grant.
Canada and Ontario have stepped up financial supports for EVs in hopes of spurring a domestic industry.
Last week, Ottawa unveiled a $3 billion innovation fund, in part to develop a “battery ecosystem” from mineral extraction and processing through to manufacturing and recycling.
In October both governments agreed to support a $1.8 billion overhaul of Ford Motor Co’s Oakville assembly plant to manufacture EVs.
Trading in First Cobalt’s shares on the TSX Venture Exchange was halted on Tuesday pending news of the agreement.
The company said funding will support restart of the refinery, estimated to cost $77 million.
The plant, located about 600 kilometers from the U.S. border, would be the sole North American producer of refined cobalt. Miner Glencore is to provide feedstock.
At its peak the refinery will produce 25,000 tonnes of battery-grade cobalt sulfate annually, which represent 5 per cent of the global market for refined cobalt, First Cobalt said.