This CEO made $250 million in lithium. This is where he invests next

“I thought, ‘Oh, okay. The good God has given me some shocking moments’, and I thought, this is one of them.”

Reed capitalized on his luck, making a very early and very recent investment in an Australian lithium mine close to his hometown of Kalgoorlie.

The investment in the Mt Marion mine, now run by Chinese giant Ganfeng and Mineral Resources Chris Ellison, followed a timely exit to deliver a small return on Neometals and its shareholders. He made nearly a quarter billion dollars from the mines on a $2 million investment.

After some generous dividends, the wealth left over has since been pumped into several clean energy processing projects, most notably the creation of a patented process for recycling lithium-ion batteries with a low carbon footprint.

Mercedes-Benz gave Reed a 50th birthday present earlier this year, when they came knocking on his door wanting to get their hands on a patented battery recycling process.

Mercedes-Benz reached a preliminary agreement with Neometals and construction partner SMS Group in May, which envisages building a recycling plant in the German city of Kuppenheim.

Neometals Chris Reed came up with a battery recycling plan that Mercedes wants to adopt. Trevor Collens

The drive for recycling is driven by a desire to secure supply chains of the essential minerals needed for batteries; lithium, cobalt, nickel, copper, aluminum, graphite and occasionally manganese.

The International Energy Agency (IEA) said last year that there was a real “danger” that the world would not have enough essential minerals to deliver the batteries and other infrastructure needed to achieve climate goals.

“Today’s supply and investment plans for many essential minerals fall far short of what is needed to support the accelerated deployment of solar panels, wind turbines, and electric vehicles,” the IEA said in a May 2021 report on the role of critical minerals in global decarbonization. .

Recovering those minerals from old and used batteries will ultimately be cheaper and less carbon intensive than mining new mineral resources from increasingly marginal geology.

Recycling should also be a more reliable and predictable source of battery minerals than some of the developing countries that dominate the production of essential mineral mines; especially the Democratic Republic of the Congo which produces more than half of the world’s cobalt.

Neometals’ patented process uses acids and other fluids to recover minerals in wet or “hydrometallurgical” systems.

The wet system distinguishes it from mainstream “pyrometallurgical” recycling methods, in which batteries are cooked at high temperatures in giant furnaces.

Mr Reed says the hydrometallurgical process is more expensive than traditional methods at face value, but recovers dramatically more valuable minerals, uses far less energy and therefore has a much lower carbon footprint.

PwC Australia’s director of energy transition Conrad Mulherin agrees that hydrometallurgy could become an increasingly common recycling method in the future.

“Currently most of the recycling companies use pyrometallurgical processing because of the relatively lower cost. However, pyrometallurgy requires high temperatures (which also means high energy consumption) and usually lower recovery rates (which means higher metal losses),” he said.

“There are several other environmental concerns with this approach; Burning plastics and other materials can release harmful pollutants.

“The industry seems to be shifting to hydrometallurgical processing.

“There is a lower energy requirement, a lower impact from by-products, and a higher metal recovery rate with hydrometallurgy. Higher metal recovery rates and higher prevailing metal prices could make the hydrometallurgical business case more attractive.”

New battery recycling rules

Recovery rates and carbon footprint are likely to be much more important once the full impact of the new battery recycling rules adopted by the European parliament in March is felt.

The rules require 75 percent of light vehicle batteries on the Continent to be recycled by 2025 and 85 percent by the end of the decade.

Batteries must contain minimum levels of recycled cobalt, lead, lithium and nickel and they must have a label indicating their carbon footprint.

The IEA estimates the current global battery recycling capacity of about 180,000 tonnes per year with nearly half in China.

“We think there will be around a quarter of a million tonnes of batteries that need to be recycled by 2025 in Europe. The current total installed capacity in Europe will be around 70,000 tonnes,” said Reed.

“It will be difficult for them [recyclers using pyrometallurgy] to grow and get licensed in the new world.

“When new battery regulations in Europe come in, sort of effective mid-decade, to achieve a recycling efficiency level or a recovery rate, all roads lead to the hydromet process.”

The IEA projects that recycling will provide up to 12 percent of the global supply of cobalt by 2040 under a scenario in which the world acts to keep temperature rises well below 2 degrees.

Under the same scenario, 7 percent of global nickel demand and 5 percent of lithium and copper demand would be met by recycled batteries.

“Recycling end-of-life lithium-ion batteries to recover valuable minerals, and to a lesser extent reuse them as second-life batteries, can relieve some of the burden of mining them from pure ore. Although this does not eliminate the need to continue investing in key mineral supplies,” the IEA said in its report.

The IEA warns that the wide variety of battery chemistry and designs for electric vehicles could hinder efforts to develop an efficient and economically viable recycling industry.

“Technology bottlenecks include the lack of design standardization for battery packs, modules and cells. Different vehicle manufacturers have adopted different battery chemistry, particularly for the cathode, and they are less likely to disclose information about cell designs and their chemistry,” the IEA said in its May 2021 report.

“The wide variety of cell types and chemicals on the market poses a major challenge for recycling, and especially for the automation of the recycling process, as each battery pack and module type requires a different approach to disassembly.”

Neometals’ agreement with Mercedes-Benz will become legally binding when the automaker ships via a formal purchase order, and Reed says Zero Technology he hoped it was formalized.

“What is certain is progressing well and on target,” he said.

“We will pin staff with them and be able to test the latest and greatest [battery] cell and battery composition and format as well as have a joint upgrade.

“It’s been amazing for us, it’s a 16 month process, a global process as you can imagine, yes, we are very pleased to have been chosen as Mercedes’ technology partner.”

‘A very strong pipe from very interested people’

The Mercedes-Benz deal comes after similar agreements with Canadian steelmaker and Japanese trading house Itochu.

“We have a very, very strong network of people who are very interested in using it, of course, once you announce that Mercedes has chosen you as a technology partner, it certainly speeds up and crystallizes a lot of commercial negotiations because they’ve made the deepest technical dives, said Reed.

“These people [Mercedes] invented the first modern cars, anti-lock braking, safety cells, they were quite innovative.”

But while the Mercedes-Benz deal and new European regulations should give it a boost this decade, Reed believes the battery recycling industry’s salad day could lie in the next decade, given that the volume of batteries requiring recycling remains small today.

“It’s been an incredible journey, we’ve been on it for six years, and we’re just getting started. The battery tsunami wasn’t very exciting until the second half of the decade,” he said.

“By 2030, even if we recycle every battery in the world, we will only supply 10 percent of [the battery minerals] what is needed for the new production that year.

“It’s not until 2040 that you might reach 40 percent to 50 percent. So this is a fantastic business with a very long life for us.

“Even if they stopped making lithium batteries today, you would still have yesterday’s production to recycle in 10 years’ time. So the basics are too compelling for us not to apply all of our resources.”

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