Is ELBM stock a buy?

Looking for a Canadian play in the battery tech field? Electra Battery Materials (Electra Battery Materials Stock Quote, Charts, News, Analysts, Financials TSXV:ELBM) may be the right fit. 

The company processes advanced materials used in lithium-ion batteries and they have a number of projects on the go, including refineries and recycling of battery materials. Last year, Electra scored a three-year agreement to supply 7,000 tonnes of battery grade cobalt to LG Energy Solution, while the company is in talks with the province of Quebec to build a new cobalt sulfate refinery in Bécancour, Quebec, and is looking to build an integrated electric vehicle battery materials park in Ontario for materials refining, recylcing and manufacturing.

Previously named First Cobalt, the company originally aimed at becoming North America’s cobalt mining champion, but when that plan didn’t work out First Cobalt changed to Electra and shifted focus to being a mid-stream player in the battery materials supply chain.

“Globalization has created an electric vehicle supply chain that is too long, too costly and increasingly unreliable,” said Trent Mell, President & CEO, in a 2021 press release. “Our automaker clients have a strong interest in greater localization of the upstream supply chain to achieve greater reliability, security of long-term supply, and a lower carbon footprint.” 

“With [North America’s] rich mineral endowment, the rationale for supplying battery materials through Asia into a growing U.S. EV market is not sustainable. Electra will act as a bridge between North American electric vehicles and a North American source of primary and recycled material, providing a low carbon solution for zero emission vehicles,” Mell said.

The stock was up above $12 back in 2018 and then fell to the $6 mark by 2021. It’s since been trading lower, sticking below $3 over the past few months.  

But the company keeps progressing and expanding its reach into the battery supply chain through technological advances. Electra made a leap forward in March with the announcement that it had successfully recovered lithium at a black mass recycling trial conducted at its refinery, with the company saying it’s a game-changer for the North American EV supply chain.

“Recycling lithium from expired batteries through hydrometallurgy lowers the carbon footprint of manufacturing electric vehicles and represents an important source of future supply for a commodity whose demand is expected to grow significantly in the coming years,” Mell said in a statement.

“From Electra’s perspective, it considerably strengthens the economics of our battery recycling strategy by providing another high-value product we can sell,” he said.