TSX-V- and Nasdaq-listed Electra Battery Materials Corporation has signed a term sheet with global commodities trader WMC Group for a five-year working capital and commercial partnership to support its Canadian critical minerals refinery.

The arrangement will finance cobalt feedstock purchases and corresponding battery-grade cobalt sales, strengthening the efficiency of the refinery’s operating cash cycle.

Electra is constructing North America's first commercial-scale, battery-grade cobalt sulphate refinery in Ontario, which converts raw cobalt hydroxide sourced from global suppliers into high-purity cobalt sulphate used in electric vehicles, electronic devices and power tools. Electra also operates a battery recycling and black mass processing demonstration plant, which recovers technical-grade lithium carbonate, nickel and cobalt products, and other elements such as manganese, copper and graphite.

The company also owns the Iron Creek cobalt/copper exploration project in Idaho to support a domestic US source of critical minerals.

Electra's partnership with WMC provides logistics management, cobalt market expertise, marketing support and access to WMC’s global commercial network as Electra transitions from construction and commissioning into operations.

In connection with the partnership, WMC has also committed to making an investment in Electra upon execution of definitive agreements.

“As Electra gets closer to production, the relationship provides the inventory working capital and provides our commercial team with broader access to cobalt buyers around the world. This agreement addresses our priorities around working capital, logistics and product qualification. WMC markets physical commodities worldwide, combining market intelligence and long-standing customer relationships.

"Those capabilities complement our existing commercial relationships and can help us optimise the refinery as we ramp toward full production," says Electra CEO Trent Mell.

"WMC is expanding its activity across battery materials, and this partnership shows the value we can add for a producer at Electra's stage. Electra is developing an important new source of refined cobalt for the North American market. Combining its refining capability with our financial and logistical resources and global customer relationships gives Electra a strong route to market as it moves into production," adds WMC battery materials head Joe Micotto.

The parties intend to negotiate definitive agreements based on the term sheet.

In addition to providing finance and logistics services for volumes up to the refinery’s nameplate capacity, WMC will act as buyer and exclusive marketing agent for corresponding cobalt sulfate production. The partnership is intended to complement Electra’s existing customer relationships, including its supply arrangement with LG Energy Solution.

The term sheet is non-binding, other than with respect to certain provisions including confidentiality, exclusivity, costs, assignment, governing law and jurisdiction.