TORONTO (Reuters) - First Cobalt Corp is in advanced talks with Canada’s Ontario province to finance the $37.5 million required to restart its idled cobalt refinery, President and Chief Executive Officer Trent Mell said in an interview on Tuesday.
If successful, such a deal would reduce First Cobalt’s funding reliance on Glencore Plc, which in July agreed to extend $45 million in loans to develop the project in stages.
The plant, located about 600 kilometers (373 miles) from the U.S. border in Cobalt, Ontario, would be the sole North American producer of refined cobalt for the electric vehicle market and lessen dependence of U.S. end-users on China, where most of the world’s cobalt refining capacity is located.
“We’re trying to bring our own sources of capital to the table, and we’re talking to the Ontario government to see if there’s an opportunity to ... get some kind of support under the umbrella of the Ontario and North American automotive supply chain,” Mell said.
He did not indicate what form that might take but said loan guarantees are a possibility. First Cobalt has also tapped Canadian Imperial Bank of Commerce to find potential partners for the project, Mell said, although those discussions are at an earlier stage.
“I think everything’s on the table for us right now,” Mell said.
Representatives for Ontario’s Ministry of Economic Development, Job Creation and Trade and its Ministry of Energy, Northern Development and Mines did not immediately respond to an email.
CIBC did not respond to a request for comment.
Canada, the United States, Australia and other western countries are keen to reduce their reliance on top supplier China for rare earths, a group of minerals used in everything from smart phones to electric vehicles.
First Cobalt has said it will decide whether to restart the plant in the first quarter next year, with initial throughput of 12 tonnes per day targeted for late 2020.
Reporting by Jeff Lewis; Editing by Lisa Shumaker