Electra Battery Materials (TSXV: ELBM) has announced preliminary results from its proposed nickel refinery and battery recycling process. The study indicates nickel and cobalt recoveries of more than 97%.

The results are from the first stage of its two-phase process which turns mine-derived feedstock and recycled battery black mass into nickel metal and battery-grade nickel sulfate. Electra says the study evaluated its capabilities at a production capacity of about 20,000 tonnes per year of contained nickel.

“We need the capacity to refine nickel for industrial, military and battery applications,” said Trent Mell, Electra’s CEO. “Electra is applying the expertise developed through our Ontario cobalt sulfate refinery and battery recycling work to advance a new source of nickel sulfate and nickel metal. Our goal is to strengthen critical mineral supply chains in the United States and Canada and reduce reliance on Chinese processing.”

Located north of Toronto, Electra’s proposed Ontario refinery is a hydrometallurgical facility project for battery‑grade cobalt sulfate production. About 600 kilometres from the U.S. border, the site will supply materials to the electric vehicle (EV) market.

Capital estimates for the first-phase nickel sulfate refinery range from $530 million (C$738.87 million) to $675 million across feedstock configurations. Nickel metal production and the second-phase recycling expansion will require separate estimates.

Electra says a second phase would expand the facility to process battery black mass, with the potential to add an additional 20,000 tonnes a year of contained nickel capacity, along with cobalt, lithium and graphite byproducts.

Given recent U.S. bans on tungsten and recycled battery materials exports, Electra says there is a need to develop a domestic processing capacity for black mass. In August, the company voiced support for the U.S. ban, with Mell calling the legislation “a matter of national security.”

Electra’s study uses its potential battery-grade nickel refinery in the southeastern U.S as the assumed site of its recycling project. However, it says final selection remains subject to further assessment.

“Our focus is on securing the feedstock, customer commitments and financing needed to support a development decision,” added Mell. “We are working with governments and potential commercial partners to establish the conditions for a competitive North American nickel refinery serving industrial, military and battery customers.”