Neometals enters lithium-ion battery recycling joint venture

Neometals SMS group GmbH Primobius lithium ion battery recycling process
Neometals and joint venture partner SMS Group will construct a battery recycling demonstration plant in Germany before deciding to proceed with commercial-scale operations in Europe.

Australian lithium company Neometals (ASX: NMT) has entered a binding deal with German metallurgical equipment supplier SMS Group GmbH to establish a joint venture to recycle lithium-ion batteries.

The incorporated 50/50 joint venture, called Primobius GmbH, is being set up to commercialise Neometals’ proprietary lithium battery recycling process for regenerating sustainably produced secondary battery materials including lithium, nickel and cobalt from spent and scrap electric vehicle and consumer electronic lithium-ion batteries.

The formal agreement follows a memorandum of understanding signed between the pair last October, which granted SMS an exclusive due diligence to evaluate the results of Neometals’ pilot battery recycling trial at SGS Lakefield in Canada.

Primobius will construct and commission a demonstration plant at SMS’s manufacturing site in Germany to validate the hydrometallurgical process at industrial scale before a decision is made to start commercial-scale operations in Europe – the largest emerging lithium-ion battery production hub outside of China.

Neometals managing director Chris Reed said the establishment of Primobius “comes at a time marked by major confluence of regulatory initiatives to stimulate the electric vehicle sector to decarbonise transportation, secure battery material supply chains and support circular economies generally”.

“Our recycling solution plays strongly to this theme by offering responsible recovery and ethical battery material supply. It also lowers the carbon footprint of battery manufacturing and contributes broadly to the sustainability of the lithium battery materials supply chain,” he added.

SMS Group senior vice president of strategic project development Herbert Weissenbaeck said the company sees “compelling growth and opportunity in the sector”.

“The timing is good to secure a foothold and build credibility with original equipment manufacturers (OEMs) who value closing the loop in the battery value chain.”

“There is a groundswell of global, and particularly European, support for sustainability and circular opportunities and this strengthens our commitment to Primobius,” Mr Weissenbaeck added.

Joint venture terms

Neometals owns the battery recycling technology through a wholly-owned subsidiary and has granted the joint venture company Primobius a limited licence to undertake evaluation activities.

Neometals and SMS will co-fund these activities, which include the construction and operation of the demonstration plant and an Association for the Advancement of Cost Engineering (AACE) Class 3 feasibility study. The evaluation activities are worth about €3.5million (A$5.78 million) in total.

If certain technical and economic criteria are satisfied, SMS will earn a 50% stake in Neometals’ wholly-owned subsidiary and the parties will jointly fund commercial activities worth €500,000 (A$830,000) required for consideration of an investment decision for an initial commercial-scale recycling plant.

Next steps

Neometals and SMS have commenced an AACE Class 4 engineering cost study of a 20,000-tonnes-per-annum lithium-ion battery recycling plant in Germany, based on the outcomes of the Canadian pilot trials.

The pair will then begin procurement and construction of the demonstration plant with commissioning targeted for early 2021.

Once the demonstration trial is completed, an AACE Class 3 feasibility study based on both 20,000tpa and 200,000tpa of battery feed will commence.

The pair will then aim to secure commercial arrangements with respect to battery feedstock, product offtake, key reagents and project financing, and for future commercial preparations.

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