LONDON (Reuters) - Luxembourg-Based Eurasian Resources Group (ERG) has signed a deal to sell cobalt for five-years from 2026 to electric vehicle battery materials producer EVelution Energy in the United States, ERG said in a statement on Wednesday.
Investment in the electric vehicle battery supply chain in the U.S. has soared due to President Joe Biden's Inflation Reduction Act (IRA), which has provided billions of dollars in green energy tax credits for cutting the nation's carbon emissions.
ERG said it would sell 3,000 metric tons of contained cobalt metal a year to EVelution, which plans to start building a low-carbon cobalt sulphate plant in Arizona in 2024.
The plant will be operational by 2026 and will be powered with energy from solar panels.
"Currently, there are no cobalt processing facilities, on a commercial scale, in the U.S., over 70% of the global production of cobalt sulphate is based in China," ERG said.
Most of the world's electric vehicle batteries and materials are produced in China.
ERG’s cobalt hydroxide which is easily turned into sulphate used in the cathode component of rechargeable batteries will be supplied by Metalkol, the company's operation in Democratic Republic of Congo.