Impact: Neutral
Electra Battery Materials has signed an MoU with Rock Tech Lithium (TSXV:RCK, Not Rated) as per which Electra plans to supply recycled lithium from its future Ontario battery recycling operation, to be upgraded into battery-grade lithium at Rock Tech’s refineries. We view this news as important for a few of reasons: 1) it validates Electra’s recycling capabilities, 2) helps financially de-risk the plant by finding a buyer for lithium-bearing material, and 3) having the recycling plant and black mass refinery in Ontario near battery plants under construction provides a leg up on future competition. While future development of a battery recycling plant is in its plans, we currently do not model it. The MoU with Rock Tech should help de-risk the process that sees Electra building a battery recycling plant, likely with the help of the Three Fires Group, making Electra its own source for black mass material to be converted into Co, Ni, Cg at its own plants, and now Li at future Rock Tech plants.