First Cobalt Corp. (TSXV: FCC) announced Wednesday that it has secured C$10 million in government loans and grants, allowing the company to accelerate the startup and expansion of its cobalt refinery in Ontario.
Under the funding agreements, the Canadian government will provide a C$5 million interest-free loan to First Cobalt, while the Ontario government will give the company a C$5 million non-repayable grant.
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 both federal and provincial governments.
First Cobalt’s cobalt refinery would reduce North America’s reliance on China, which currently dominates the supply chain for rechargeable lithium-ion batteries.
The plant, located about 600 km from the US border, would be the sole producer of refined cobalt in North America. Feedstock will be provided by global miner Glencore.
Once complete, the facility will be capable of producing 25,000 tonnes of battery-grade cobalt sulfate annually, which could represent 5% of the global market for refined cobalt, according to First Cobalt.
The project has an estimated capital cost of C$77 million ($60 million), including the C$10 million in federal and provincial contributions. This support will also help secure well-paying, long-term jobs in Ontario, said First Cobalt.
The refinery adds another significant piece to the automotive supply chain in Canada, following recent announcements by both levels of government in support of battery electric vehicle production.
Last week, Ottawa unveiled a C$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 C$1.8 billion overhaul of Ford Motor’s Oakville assembly plant to manufacture EVs.
(With files from Reuters)