Fuse Cobalt Inc. on Thursday said it has signed an agreement to potentially supply raw cobalt to Electra Battery Materials Corp.

The two companies signed a non-binding memorandum of understanding that is the first step for Fuse to supply raw cobalt from its Teledyne and Glencore Bucke exploration projects in Cobalt, Ontario, to Electra's nearby cobalt sulfate refinery in Temiskaming Shores, Ontario.

The two sides will exchange information in advance of a potential definitive agreement, where Electra would commit to purchase up to 2,000 tons of cobalt annually from Fuse.

Electra Chief Executive Officer Trent Mell said having a domestic source of ethically-produced, low-carbon emissions cobalt raw material would help address the demand for onshore battery materials for electric vehicles.

Write to Glenn Johnson at Glenn.Johnson@WSJ.com

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