Electra updates construction progress on battery materials park
Electra Battery Materials Corporation says construction of its battery materials park in Northern Ontario is on schedule, despite supply chain disruptions that have plagued the construction sector.
The company provided an update on its construction plans last month, identifying that construction of its cobalt refinery should wrap up by the end of this year.
"Despite supply chain disruptions and inflationary price pressures caused by the lingering effects of the global pandemic and recent geopolitical developments, Electra made considerable progress in Q1, advancing the construction of our expanded cobalt refinery," said CEO Trent Mell. "Most notably, we received our Industrial Sewage Works permit, started construction of the solvent extraction plant, and received approval of our Closure Plan. Completion of these milestones paves the way for the commissioning of our refinery expansion in Q4 2022, consistent with our expected timelines."
Despite good construction progress, the project has not been immune from escalating prices.
Electra says cost pressures have emerged from systemic inflation, constrained global supply chains and the sanctions on trade with Russia. These have combined to increase the average cost of project inputs, such as steel, copper, nickel and freight rates, all of which have put the original budget at risk. Labour and contractor rates are also higher with recent 8 to 9% wage settlements with construction trades, as well, a number of concurrent development projects in Canada have created a very competitive market for experienced trades.
The company believes it will have to add an additional 5% to 10% in costs above its initial capital budget of US$67 million. It credits an early decision to create an experienced owner's team as a way of mitigating some of these impacts.
Total incurred costs for the refinery construction project at the end of the first quarter of this year were $25 million.
Electra's core strategy is to produce low carbon, ethically sourced battery materials for the North American electric vehicle supply chain.
The company is focusing on creating the first integrated battery materials park in North America, providing refined cobalt, nickel and recycled battery materials to North American battery precursor manufacturers.