INTERVIEW: Recyclus Group prepares to ramp up battery recycling as black mass demand takes off

The rapid expansion of global battery production capacity and the anticipated shortfall in the availability of essential raw materials like lithium, cobalt, nickel and copper are contributing to surging demand for black mass, top executives of UK-based battery recycler Recyclus Group told S&P Global Commodity Insights.

The material requirements associated with the rapidly expanding pipeline of gigafactories suggest that there will not be enough supply of raw materials to satisfy demand should each of them progress to full production on time, said Recyclus Group Director Robin Brundel and CEO Alexander Stanbury said in a joint interview.

"If every one of the 300 gigafactories under development enters the market within the next three years as planned, there just won’t be enough raw material to supply them," Brundle said.

The global lithium market alone could see a deficit of up to 220,000 mt by 2030 if all projects in development are executed on time, according to forecasts released by S&P Global Market Intelligence in January 2022.

According to Brundle, in order to ensure that they have the necessary raw materials upon completion of their projects, gigafactory developers are purchasing black mass, comprised of crushed and shredded end-of-life battery cells, in large volumes well in advance.

With around 50 battery production plants set to enter production by 2030, Europe is experiencing a wave of investment in battery recycling capacity as automakers and battery manufacturers seek to offset the anticipated global shortfall in critical metals such as lithium, nickel, cobalt and copper.

With most hydrometallurgical recycling plants seeking an annual supply of 50,000-100,000 mt of black mass, Brundle said global recycling capacity is set to fall well short of demand.

Launches ahead at two plants

Recyclus Group is preparing to launch industrial-scale battery recycling operations at two facilities; a lead acid battery plant in Tipton, West Midlands, and a lithium-ion-battery recycling plant in Wolverhampton.

At the Tipton plant, Recyclus Group has started manually recycling end-of-life batteries and is preparing to commence industrial-scale automated processing after it receives final approval from the UK Environmental Agency.

The company aims to increase its recycled lead-acid volume from 16,000 mt/year during the first full year of operation, to 80,000 mt/year by 2027 through the addition of four new lead-acid battery plants.

At Wolverhampton, Brundle said the lithium-ion-battery recycling plant is securing its environmental license, with operations expected to begin in July.

The plant will be the first in the UK with the capacity to recycle lithium-ion batteries on an industrial scale, with an initial annual recycling capacity of 8,300 mt.

According to Brundle, the Wolverhampton plant, which has a recovery rate of 90%, can process the five key battery chemistries as feedstock for black mass production including handheld batteries and electric bike batteries as well as batteries for cars, trains and forklift trucks.

By 2027, the company aims to have an additional four lithium-ion battery recycling plants in operation with a total recycling capacity of 41,500 mt/year.

Brundle added that the company is exploring how it can eventually roll out its modular recycling plants in Europe and the US.

Doorstop battery collection

In addition, the company is planning to provide doorstop collection as part of its end-to-end battery recycling service.

On Nov. 2, Recyclus said it would partner with UK hazardous waste management and service delivery provider Slicker Recycling to collect battery waste from around the UK and safely transport it to the closest Recyclus plant.

In addition, Recyclus has partnered with the University of Birmingham to design and build a compact prototype recycling truck capable of processing a range of lithium-ion batteries.

Offtake discussions

While Recyclus has been involved in discussions with a number of international companies regarding potential offtake arrangements, Brundle said that the company is likely to offer 1 mt bag assays on a secure sales portal as a starting point for its business.

Stanbury added discussions are ongoing about long-term supply agreements with selected buyers.

"We’ve made sure that we have a number of offtakers who are 100% happy, and in fact all of them wanted to take 100% of the black mass, which is a delightful place to be," Brundle said.

Platts, part of S&P Global Commodity Insights, launched nine daily black mass price assessments April 17 aimed at bringing greater transparency to pricing of the battery raw materials market.

Platts assessed LFP black mass DDP China at Yuan 11,700 per percent lithium May 30, down Yuan 1,700 on the week, showed S&P Global data.

For Ni-Co black mass EXW Europe, cobalt payables were assessed at 60% basis European cobalt metal 99.8% on May 30, unchanged from a week earlier.

Nickel payables were assessed at 60% basis LME nickel May 30, down 5 percentage points from a week earlier.