New Arizona factory to add $330M to economy making elements for 470K electric cars yearly
A small town in Yuma County will be the new home of the only cobalt processing facility in North America and will bring hundreds of jobs to the county.
Evelution Energy plans to develop a solar-powered, carbon-neutral facility to process cobalt sulfate for electric vehicle batteries. Construction is expected to begin next year with completion projected in 2025 or 2026.
On March 6, the Yuma County Board of Supervisors unanimously approved a special-use permit for the company to develop its facility on a 138-acre-lot in Tacna.
Cobalt is a highly sought-after mineral used in ion-lithium batteries. About 70% of the world’s cobalt is produced by the Democratic Republic of Congo. The cobalt is then sent abroad and processed into cobalt sulfate for electric vehicle batteries, with more than 70% percent of cobalt sulfate refined in China and most of the remainder processed in Finland and Indonesia.
The newly formed Yuma-based company wants to bring battery-grade cobalt processing stateside.
“We want to bring this product to America … and process it here and sell it to North American electric vehicle battery manufacturers and carmakers,” Navaid Alam, Evelution Energy’s co-founder, president and CEO, said.
According to an economic impact assessment published by the Greater Yuma Economic Development Corporation, Evelution Energy is estimated to generate $330 million in positive economic impact in the county related to the development of the facility, from construction to road improvements and labor.
In addition, the company will create 60 jobs and generate $3.6 million annually in payroll, as well as an average of $2.5 million in local and state taxes per year. The company will bring 300 additional jobs to the area including trucking and supplier jobs, as well as other jobs needed to support the plant.
Construction of the facility is estimated to bring in over 1,229 jobs and $55 million in income.
Julie Engel, the president and CEO of Greater Yuma Economic Development Corporation, reiterated these numbers are merely estimates, as this facility is the first of its kind in North America.
To help the local community, Evelution Energy said they will provide free training programs for their workers at the Arizona Western College campus in Wellton, with the help of the Arizona Commerce Authority.
The facility will be green, using solar power and recycling water
The site where Evelution Energy will build its plant is located between Tacna and Dateland. It was previously owned by Alam and his family and already fully permitted for intensive industrial use as an Ethanol Processing Facility, which was never built due to the drop in ethanol prices.
The cobalt processing plant will run on renewable energy, producing more solar power than it can use. In turn, the company plans to sell its excess energy to local utility company Wellton-Mohawk Irrigation and Drainage District at cost for the farming community to use.
Evelution Energy expects to produce 33,000 metric tons of electric vehicle battery grade cobalt sulfate per year to support the domestic production of approximately 470,000 electric vehicles annually, according to a company press release.
Gil Michel-Garcia, the company's co-founder executive vice president and general counsel, said their product will have a smaller carbon footprint than cobalt sulfate imported from other countries.
Whereas much of the world's cobalt is exported from Africa for processing in China before being sold in the U.S., cobalt used by Evelution Energy will be sent from Africa straight to Ensenada, Mexico, before being trucked three and a half hours to the Yuma processing facility.
To process cobalt sulfate, the company plans to use 74 million gallons of water per month, sourced from groundwater wells, according to a Yuma County staff report about the project. However, it is estimated that 70% of the water used in production will be recycled and reused.
The company also aims to have a carbon-neutral facility. According to its website, the company will measure and report greenhouse gas emissions annually, and implement decarbonization strategies such as "efficiency improvements, renewables, and designing for circularity."
Why Yuma is the perfect location for Evelution Energy’s facility
The founders decided on Yuma, not only because of Alam’s personal ties to the community – his wife, who grew up in Yuma, has family there – but also because of its strategic location near the Arizona – California border.
The founders said they benefit from Arizona's lower cost of living and "lower regulatory jurisdiction" but still close to California, which will soon be the largest source of end-of-life batteries, Michel-Garcia said.
Evelution Energy hopes to eventually expand its operations to include electric vehicle battery recycling, as growth in demand for zero-emission vehicles rise and batteries reach the end of their life cycle.
Also the plant is off the Interstate 8 highway and Union Pacific Railroad which "puts us in a very good strategic position to recycle batteries in the future."
The founders also said they wanted to build their facility in an economically disadvantaged area where they would have “a tangible social and economic impact on the community.”
Michel-Garcia noted that Tacna is considered a Qualified Opportunity Zone. This type of area is considered low-income and an area that needs economic and job growth. Investors who have long-term investments in these areas can defer taxes on eligible capital gains.
Another benefit to being in Yuma is its title as the sunniest place on Earth, which allows for an abundance of solar power production.
Evelution Energy committed to responsibly sourced cobalt
Of the total cobalt mined in the DRC, about 15% to 30% is produced by unregulated artisanal small-scale mining, the source of reported human rights violations, where children are put to work and miners work in unsafe conditions, according to a paper published by the New York University and Stern Center for Business and Human Rights.
Michel-Garcia said Evelution Energy will strive to use cobalt only from companies that comply with the guidelines of the Responsible Cobalt 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.
He also said Evelution Energy will require that suppliers disclose their sources of cobalt used and "avoid and/or mitigate procurement of products containing cobalt obtained from sources that fund or support inhumane treatment” in conflict-affected and high-risk areas.
Electric vehicle battery industry is growing
Michel-Garcia noted how Arizona is becoming a hub for electric vehicle manufacturers and suppliers, with ElectraMeccanica in Mesa, Nikola Motor Company in Coolidge and Lucid Motors in Casa Grande as well as numerous battery recycling companies and battery manufacturers with factories throughout the state.
He reiterated how the federal government’s Inflation Reduction Act and Bipartisan Infrastructure Law have been “critical” to incentivizing and accelerating the growth of the electric vehicle battery industry in the U.S.
According to an article by the U.S. Bureau of Labor Statistics, sales of electric vehicles have increased more sharply in 2021, compared to a decade earlier. In addition, some forecasts project U.S. electric vehicle sales could reach 40 percent of total passenger car sales by 2030.
Engel said “innovators” like Evelution Energy will help restore future supply chain issues by bringing processing stateside.
“The opportunity is very ripe because of the administration’s push to bring some of these resources back to the U.S.,” Engel said, adding that bringing on shore operations to the U.S. will help avoid shortages of important materials and decrease dependence on other countries.
Coverage of southern Arizona on azcentral.com and in The Arizona Republic is funded by the nonprofit Report for America in association with The Republic.
Reach the reporter at email@example.com.
This article originally appeared on Arizona Republic: Evelution Energy cobalt processing plant to add $330M to Ariz. economy