EVelution Energy

is building the first solar-powered, carbon-neutral, cobalt processing facility in the United States.

Our mission is to contribute to the transition to a energy independent future by providing battery-grade and super alloy materials to the burgeoning Electric Vehicle (“EV”) battery market and the aerospace and defense industries in North America.

Watch our plant take shape

Navaid Alam on Bloomberg TV – 27 Sep 2023

EVelution Energy’s CEO discussed their Arizona solar-powered cobalt processing plant on Bloomberg TV, highlighting its contribution to U.S.  energy independence. The conversation also touched on the current U.S. EV battery materials and super alloy metals production and how recent legislation impacts their project. This initiative is part of a broader effort to reduce foreign material reliance, support the growing EV, aerospace and defense industries, and promote sustainable domestic production.

➥ Read more here

Strategically Located Facility:

Our processing facility is in Yuma County, Arizona, near Wellton, close to the California border. Cobalt hydroxide feedstock is expected to be received by container at the Ports of Ensenada, Mexico, and Houston, Texas for transfer to our facility by truck. The facility is four hours by truck from ports on the Southern California and Northern Baja coast.

Our property is accessible by both interstate highway and rail. Our 293 acre property spans the Union Pacific Railroad track and U.S. Interstate Highway 8.

There is currently no other operational solar-powered cobalt processing facility in the United States. Most cobalt processing capacity is presently located in China.

Fast-Growing Demand for EV battery materials and super alloy metals:

The Facility will service the fast-growing EV battery and super alloy metal market in North America. This sector is undergoing a major transformation led by U.S. car manufacturers, global aerospace and defense conglomerates, and the U.S. Federal Government, with billions of U.S. Dollars in investment.

In North America, the market for EVs is expected to grow at a compound annual growth rate (CAGR) of between 35-37% from 2022-2028, reaching approx. US$330bn in 2028, which is equivalent to about 2.9m to 3.0m EVs per year by 2028.

The market for cobalt metal  is expected to grow at a CAGR of 10-15% from 2025-2035. Cobalt metal is vital for use in applications such as jet engines, hypersonic missiles, stealth bombers and rare earth magnets.  Cobalt metal can also be stored in our warehouses as part of the US National Defense Stockpile.

 

Experienced Management Team:

EVelution Energy’s management team comprises C-suite level professionals who bring extensive experience in developing, operating, and financing non-ferrous metal processing facilities, as well as oil and grain terminals and other core infrastructure.

Our management team’s core infrastructure asset experience has occurred worldwide in strategically important locations for the countries in which they were developed. Team members have extensive experience in partnering with large blue chip multi-national companies, global commodities corporations, sovereign wealth funds, pension funds, endowments, family offices, multilateral agencies, and private equity funds.

Market Opportunity for Battery Grade Materials and Super Alloy Metals

The Facility will purchase input materials such as Cobalt Hydroxide and other Cobalt Intermediates from major suppliers under long-term supply contracts and will process such Cobalt Intermediates up to Battery Grade Cobalt Sulfate and Alloy Grade Cobalt Metal, to be sold under long-term offtake agreements and spot contracts to EV Battery Material Precursor Plants, Aerospace and Defense companies and global metal traders in the U.S. and Canada.

The North American EV Battery Manufacturing Sector is experiencing explosive growth. Since the enactment of the U.S. Bipartisan Infrastructure Law and the U.S. Inflation Reduction Act, there has been an enormous wave of North American EV battery cell manufacturing projects being announced. These projects represent more than US$92bn of EV battery manufacturing capacity. Most projects are scheduled to begin production between 2025 and 2030.

The U.S. Department of Energy estimates that North American EV battery manufacturing capacity will increase from 55 GWh/year in 2021 to 920-1,000 GWh/year by 2030, a CAGR of approximately 36.75%. The U.S. is expected to need to import even larger amounts of cobalt sulfate for EV batteries when domestic EV battery production begins to come online in 2025-2026. Currently approximately 75% of the world’s cobalt sulfate production comes from China (with no production in the U.S.).

The DoD has received Title III Defense Production Act (DPA) authorization to assist in the expansion of domestic production capabilities of critical metals such as cobalt, to reduce dependency on imports from “foreign entities of concern.”

The U.S. currently imports approx. 9,600 mt of cobalt metal per year, primarily for Aerospace and Defense applications. Currently approximately 66% of such cobalt metal production comes from Canada, Norway, Japan and Australia (with no production in the U.S.).

Pursuant to Section 303 of the DPA, the DoD has been instructed to secure a reliable & sustainable supply, and build a strategic reserve, of critical materials like cobalt through domestic processing.

A lack of domestic midstream processing and manufacturing capacity in the U.S. means that domestic car makers, aerospace and defense companies are heavily reliant on imports for key battery and super alloy materials, with currently more than 70 percent of the world’s battery and alloy grade cobalt being produced in China. This is the gap that EVelution Energy is seeking to fill by linking its U.S. based battery grade cobalt sulfate and alloy grade cobalt metal production capabilities with the massive EV batteries, aerospace and defense production capacities that are coming online in North America.

Our new processing facility is expected to be the first solar-powered cobalt processing facility in the United States. Moreover, with an expected annual capacity of 7,000 tons of cobalt, our new processing facility is expected to be able to meet 40 percent of the expected 2027 cobalt demand in relation to U.S.-domestic production of electric vehicles, aerospace and defense applications and the US National Reserve Stockpile.

EVelution Energy is expected to start construction of its cobalt processing facility in 2025 and intends to become operational by the end of 2027 or the beginning of 2028.

Best-in-Class Green Facility

Fully Solar Powered

Our processing facility will be fully powered by our own 28.4 MW (peak) solar power arrays, with excess power during the day being used to recharge our battery storage and/or being resold to the local power utility.

Solar power will heat the water and process solutions for hydrometallurgical cobalt processing. This heated solution will be stored at temperature in large storage tanks overnight. Using solar power rather than propane or natural gas will further reduce our carbon-footprint.

Solar electricity will be stored overnight in electric battery storage units. Battery storage will further reduce our overnight power requirements from the local utility.

Using & Recycling Our Own Water

Water for our processing facility is intended to be sourced from aquifers running under our property, using hydraulically separated artesian wells 1,000+ feet deep.

A water treatment plant will treat and recycle approx. 70% of water used. Recycling will minimize new water usage and disposal of used water onto our land.

 

No On-Site Tailings & Minimal Dust

Tailings will be collected, transported and safely disposed of at a licensed local landfill located less than 20 miles away. Not installing tailing ponds on our facility minimizes risk of potential contamination of our own or surrounding land.

Materials will be unloaded, processed, stored and loaded inside our closed facilities, using state-of-the-art air filtration systems. Such control measures will minimize the release of dust or other air contaminants from our operations.  We will also have climate  controlled warehouses on site to store cobalt metal and cobalt intermediates as part of a cobalt futures exchange qualified warehouse network that would provide liquidity and pricing for  US based futures contracts.

Commitment to Net Zero Emissions

We believe we have a responsibility and opportunity to play a leading role in the U.S. economic transition to net zero emissions. We plan to design and operate our processing facility and certify our cobalt production as carbon neutral.

We will strive to:

  • measure and report greenhouse gas emissions annually;
  • implement decarbonization strategies in line with the Paris Agreement, such as efficiency improvements, renewables, and designing for circularity;
  • power our operations (on a net annual basis) with 100% clean, renewable energy through the use of our own solar power arrays; and
  • take actions to remove any remaining emissions and/or neutralize them with quantifiable, real, permanent, and socially beneficial offsets to become carbon neutral.

We will apply sustainable practices across all facets of our business:

  • Operations. We will use resources efficiently and thoughtfully and use science-based targets to improve how we operate. We plan to use adaptive-reuse construction practices, efficient energy management across our facilities, recyclable or reusable shipping materials at our plant, and streamlined logistics across our distribution channels.
  • Manufacturing. Our carbon neutral goal requires a commitment to manufacturing innovation. We intend to work with our suppliers and supply chain partners on ethical sourcing practices and we will audit waste streams to identify how to use materials more responsibly.

Commitment to Responsibly Sourced Cobalt

We believe we have a responsibility to source the cobalt that we process in a socially responsible manner. We are committed to the ethical and responsible sourcing of cobalt in an effort to promote the respect of the human rights of the people employed and/or affected by our cobalt supply chain. 

As a result, we have enacted our own Responsibly Sourced Cobalt Policy to reinforce our commitment to a responsible and transparent cobalt supply chain including a commitment to strive to source cobalt from companies that comply with the guidelines of the Responsible Minerals Initiative (“RMI”) and the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (“CAHRA”).

We are committed to responsible sourcing and aim to identify and mitigate human rights abuses, child labor and other social risks in our supply chain and therefore our Responsibly Sourced Cobalt Policy provides that we intend to exercise commercially reasonable efforts to:

  • know, and require that each of its suppliers, disclose to us the sources of cobalt used in their products;
  • avoid and/or mitigate procurement of products containing cobalt obtained from sources that fund or support inhumane treatment in CAHRAs;
  • avoid and/or mitigate procurement of any cobalt from companies or sources that do not comply with the RMI and/or OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from CAHRAs.

Facility Located in a “Qualified Opportunity Zone”

Our processing facility is located in a Qualified Opportunity Zone (QOZ) in the State of Arizona, identified as Qualified Opportunity Zone No.: 0427011202.

The Opportunity Zone Program was established by the U.S. Tax Cuts and Jobs Act of 2017 to provide major tax incentives for private, long-term investments in economically distressed communities.

QOZs offer tax benefits to U.S. investors who elect to temporarily defer tax on eligible capital gains, if they timely invest those eligible capital gain amounts in a Qualified Opportunity Fund. Potential Tax benefits include:

  • deferment of capital gains on funds invested until the end of 2026;
  • no capital gains tax on returns if the investment is held for more than 10 years due to receiving a stepped-up basis to fair market value at sale after 10 years;
  • no income tax on dividend distributions to the extent of investor’s allocated basis in the debt of the Company and/or the annual allocated depreciation of the book value of the processing facility; and
  • no depreciation recapture on the sale of any investment.

Investment in an Economically Disadvantaged Area

The Facility is expected to have a major economic impact on the local economy, an economically disadvantaged area in Yuma County Arizona, designated as a Qualified Opportunity Zone. Our solar-powered processing facility is expected to generate more than 360 well-paid jobs over the life of the project. Furthermore, our solar power plant will supply not only all of our own power needs but is also expected to support the surrounding agricultural community with clean power at an affordable cost (Yuma being the sunniest county in the U.S. and thus allowing reliable base load solar power supply).

The U.S. Government and the State of Arizona are heavily incentivizing private industry to build critical mineral processing, EV Battery, Auto and Chip manufacturing facilities. Several leading EV manufacturers, such as Lucid Motors and Nikola Motors, have already established their headquarters in Arizona. Intel and Taiwan Semi-Conductor are building multi-billion dollar Chip fabrication plants in Arizona.  LG Energy Solution is building a multi-billion dollar EV Battery manufacturing plant in Queen Creek, Arizona which could well be an indirect customer of ours.  The U.S. Inflation Reduction Act, recently introduced in August 2022, also offers tax credits and incentives for automakers using battery metals produced domestically. Additionally, the U.S. Tax Cuts and Jobs Act of 2017 offers major tax incentives for investments in Qualified Opportunity Zones. Finally, the U.S. Department of Defense and EXIM Bank are offering grants and low interest loans to U.S. companies under various programs to incentivize the construction of critical minerals processing and manufacturing facilities in the U.S. to produce qualifying components and materials like Battery Grade Cobalt Sulfate and Cobalt Alloy Grade Metal.

Supply Management and Product Diversification

EVelution Energy will enter into long term supply contracts and use hedging and basis risk swaps based on futures exchanges in London, Shanghai, and New York, to assure supply and mitigate price volatility related to the underlying metals purchased, processed, and sold. End users may also participate in risk mitigation for the supply of EV Battery Materials and Super Alloy Metals vital to U.S. supply chain management by entering into long-term offtake agreements with EVelution Energy, with flexible price terms based on market conditions.

EVelution Energy intends to utilize its international network, and will enter into strategic partnerships, to supply the growing demand for EV-battery materials and super alloy metals primarily in the U.S. and Canada, but also potentially in Japan, Korea, and Europe.

It will also use its knowledge of industry growth in EVs to potentially expand capacity into EV battery recycling.

 and anOur Facility is strategically located near the border with California. As a result, we are well positioned to potentially recycle EV batteries from electric vehicles that reach the end of their product lifespan (EV batteries are quite heavy and expensive to transport long distances).

California has the largest production and use of EVs in the United States, as California was the birthplace of the first mass produced EVs. The oldest electric vehicles are predominantly located in California and therefore their batteries will be in need of recycling the soonest.

The excess land around our Facility can be used to build an EV battery and metal recycling facility in the future.