International commodity traders Trafigura of Singapore and electric vehicle (EV) battery materials processing company Evelution Energy, signed a memorandum of understanding to develop a battery-grade cobalt sulphate processing facility in Arizona, US.
They expect it to have annual capacity of 7,000 tonnes. The facility would be able to meet 40% of the expected 2027 cobalt demand for US production of EVs.
The companies said they are considering expansion to include a nickel sulphate processing facility.
Under the deal, Trafigura will assist Evelution of the US with a supply of raw materials and in marketing its production of cobalt sulphate and nickel sulphate.
The US Inflation Reduction Act applies. It was introduced in August 2022, and offers tax credits and incentives for car manufacturers using battery metals produced domestically.
Evelution Energy expects to start construction of its facility in late 2023. It will be solar powered and should also support the surrounding agricultural industry with energy.
Socrates Economou, Global Head of Nickel and Cobalt Trading at Trafigura, said: “A lack of midstream refining and cathode manufacturing capacity means that car makers in the US and Europe are heavily reliant on imports for key battery materials. We see this as a gap that Trafigura can help fill by linking our raw material sourcing capabilities with new battery and electric vehicle production capacities in North America.”
Earlier this month, Trafigura entered into an $800 million five-year loan underwritten and arranged by Société Générale and syndicated to seven participating banks. The loan is guaranteed by the German government. It supports the commitment by Trafigura to deliver up to 500,000 tonnes of non-ferrous metals over five years into Germany.
Photo: commodity traders at Trafigura