A newly formed entity is planning to build a $200 million cobalt sulfate processing plant for electric vehicle batteries in Yuma County in southern Arizona.
EVelution Energy LLC said it will start construction in 2024 on its new solar-powered facility along Interstate 8 in Tacna in an Opportunity Zone, or an economically distressed area that offers tax incentives for long-term investment.
The project could be one of the first cobalt processing facilities of its kind in the U.S. and is expected to create 60 jobs and be operational by 2026. Tucson-based M3 Engineering and Technology Corp. will provide engineering, procurement, construction and management.
EVelution Energy's facility is expected to produce 33,000 metric tons of electric vehicle battery grade cobalt sulfate per year, which it said is enough to support the domestic production of about 470,000 electric vehicles annually.
About 105 acres of EVelution's property will comprise its solar power arrays and about 25 acres will house the processing facility.
Why Yuma was selected
Gil Michel-Garcia, executive vice president and general counsel for EVelution, told AZ Inno that they chose Yuma County because their founder, Navaid Alam, previously owned the site and has longstanding contacts and family in the area.
The company also pointed to Yuma's sunshine for solar and the state's growing electric vehicle industry which includes companies such as ElectraMeccanica, Nikola Corp., Lucid Group Inc. and other startups.
EVelution said it also plans to partner with Arizona Western College in Welton to provide free training programs for its workers, sell their renewable solar energy to local farmers and consider setting up EV charging stations on site.
Right now, most of the world's cobalt for lithium-ion batteries is processed in China, while the Democratic Republic of Congo mines a large portion of cobalt and has come under scrutiny for its inhumane working conditions.
EVelution said its facility will use cobalt hydroxide feedstock mostly sourced from the DRC with companies that comply with the Responsible Mineral Initiative and the Organization for Economic Cooperation and Development's due diligence guidance for responsible supply chains of minerals from conflict-affected and high-risk areas.
It will use groundwater from the aquifers around its facility and a water treatment plant to recycle about 70% of its water, the company said. Yuma County Board of Supervisors approved a special use permit for the plant to allow for the production of cobalt sulfate in early March.
EVelution is one of multiple projects within the electric vehicle supply chain that has announced plans following the Inflation Reduction Act, which became law in August 2022 and offers federal incentives for electric vehicles manufactured in the U.S.
“The combination of new legislation, increased EV vehicle production and worldwide EV battery shortages have all led to the vision and future deployment for this cobalt processing facility, which will create a tremendous positive impact on the nation’s EV supply chain, the Department of Defense's critical minerals supply chain, and attract opportunities from new U.S. mining sources," said Julie Engel, president and CEO of Greater Yuma Economic Development Corp. in a statement.
Recently, South Korea-based LG Energy Solution announced plans to invest $5.5 billion in a pair of battery factories in Queen Creek south of Phoenix. Utah-based American Battery Factory is also building a 2 million-square-foot lithium-iron phosphate battery plant in the Tucson area.
