Analysis: Metal recyclers prepare for electric car revolution

RecycLiCo Battery Materials

17/11/2017 12:06

* Electric vehicle sales expected to surge in next decade 
    * Battery recyclers seeking new ways to retrieve metals 
    * Reliance on Congolese supply pressures cobalt market 
    * GRAPHIC-Demand for battery materials: http://reut.rs/2zzGHaG 
    * GRAPHIC-Electric vehicles on the rise: http://tmsnrt.rs/2eNwQoZ 
 
    By Jan Harvey 
    LONDON, Nov 17 (Reuters) - Recycling companies are honing 
processes to extract metals from old batteries more cheaply and 
efficiently so they can capitalise on an expected shortfall in 
materials such as cobalt and lithium when sales of electric cars 
take off. 
    The main obstacle recyclers face now is a shortage of spent 
batteries to recycle to make their technology cost-effective, 
but those at the forefront of the industry are confident the 
supply, and profits, will come. 
    "The value of lithium carbonate and natural or synthetic 
graphite has doubled or tripled in the last three or four years, 
becoming the most valuable materials besides cobalt in the 
automotive battery," Albrecht Melber, co-managing director of 
German recycling firm Accurec, said.  
    "There are big values that can be recycled in the future." 
    Electric vehicle sales are expected to pass 14 million a 
year by 2025 from less than a million now, fuelling a surge in 
the consumption of battery materials. 
    Data specialist Benchmark Mineral Intelligence predicts the 
industry will need an extra 30,000 tonnes of cobalt and 81,000 
tonnes of lithium a year to meet demand by 2021. 
    Commodity research group CRU expects 11,600 tonnes of cobalt 
to come from recycling in 2021, up from 7,110 a year now, and 
24,900 tonnes by 2026, accounting for 9.7 percent and 17.9 
percent of the total market supply respectively. 
    In China, where electric vehicle sales topped half a million 
last year, recyclers are getting ready to deal with a mountain 
of battery waste and others also see opportunities.  urn:newsml:reuters.com:*:nL4N1LT325 
     "A 1,000-pound lithium cobalt battery contains about $6,000 
worth of cathode material at the top end of the value chain and 
about $1,700 for a nickel-cobalt-aluminum battery at the low 
end," said Larry Reaugh, chief executive of Canadian metals 
recycler American Manganese  AMY.V . 
    "If this equated to mining you would have a very high grade 
feedstock," he said. "We're mining batteries, you might say."    
     
    COBALT PRESSURE 
    Most electric cars are powered by lithium NMC batteries 
which use a cathode composed of nickel, manganese and cobalt and 
a graphite anode. 
    Mining enough cobalt to meet demand is a particular concern 
as most of the world's supplies come from Democratic Republic of 
Congo, where mining areas are prone to conflict. The price of 
cobalt  COB-CATH-LON  has more than doubled so far this year. 
    Supplies of lithium, mainly mined in Chile, are under far 
less pressure at the moment and new production is due to come on 
stream in Argentina and Australia. 
    But concern the supply of lithium in battery-ready form will 
struggle to keep pace with electric car sales has pushed prices 
up more than 30 percent to a record $12,000 a tonne this year. 
 urn:newsml:reuters.com:*:nL8N1NJ6XJ 
    Besides a shortage of old batteries to recycle, companies 
also face challenges extracting lithium in a reusable form. 
    Most recyclers heat old batteries to high temperatures to 
retrieve metals, a process known as pyrometallurgy. But this 
generally only yields cobalt, and sometimes nickel, while 
lithium is more difficult and expensive to extract. 
    The cost of recycling varies widely, but to be economical, 
CRU estimates it would need to be transformed back into lithium 
carbonate at a maximum cost of $7,000 a tonne.  
    For now, lithium usually ends up in waste slag, which can be 
used as a building material, or is thrown away. But with the 
price of all these metals rising, that picture may change. 
     
    MATERIAL MATRIX 
    Technological advances are key to retrieving more waste 
metal from batteries and some companies say they have developed 
ways to get lithium that will come into their own once there's a 
steady supply of spent batteries to recycle.  
    Umicore  UMI.BR  uses a combination of pyrometallurgy and a 
chemical process known as hydrometallurgy to retrieve lithium 
and rare earths from slag, as well as extracting cobalt, nickel, 
and copper. 
    "A battery is a complex material matrix," Umicore says. 
"However, our process allows (us) to separate and concentrate 
the lithium in one process step, and yields alloys with cobalt, 
nickel and copper." 
    Umicore operates a pilot plant with a 7,000-tonne capacity 
that can process some 35,000 electric vehicle batteries a year. 
    Analysts say the Belgian company, a well-established 
materials recycler, is by far the most developed lithium ion 
battery processor in Europe. 
    "For investors to play the recycling theme, for now the best 
way is Umicore," said Tobias Bischoff, a portfolio manager at de 
Pury Pictet Turrettini & Cie who advises NSF Wealth Management's 
Global New Mobility fund. 
    U.S. company Retriev Technologies has been recycling lithium 
ion batteries at its plant in Trail, British Columbia, since 
2002, recovering cobalt, nickel and copper. It expanded a 
facility in Ohio to process lithium ion batteries two years ago. 
    Between 2012 and the end of last year production at its 
Trail facility doubled, with the plant processing about 1,200 
tonnes of batteries. The company expects growth at a similar 
rate over the next five years, vice president Todd Coy said. 
    Other companies are also pushing into lithium ion battery 
recycling. Accurec now has a 1,000-tonne capacity demonstration 
plant for recycling car batteries at its Krefeld facility in 
western Germany, though it says volumes remain small. 
    Australia's Neometals  NMT.AX  is building a pilot plant in 
Montreal, aiming to develop processes tested in laboratories and 
small-scale plants for extracting cobalt, lithium and nickel.  
    Also in Canada, American Manganese says it can retrieve 100 
percent of the lithium - as well as cobalt, nickel, manganese 
and aluminium - from batteries, using technology originally 
developed to process low-grade manganese ores. 
    It has completed a proof of concept for its process and has 
a patent pending. A pilot plant is the next step.  
     
    SECOND LIFE 
    But commercial development for recyclers is tough without 
the economies of scale that will come with a greater supply of 
spent batteries. Retriev, for example, says large volumes will 
be key to developing lithium recycling using hydrometallurgy. 
    "At current commodity prices we need approximately 4,000 
tonnes per year of batteries to justify the estimated capital 
costs," Retriev's Coy said, more than three times its current 
processing volumes. 
    "We are confident this volume will be coming in the future - 
beyond 2023 - but the market is not there yet." 
    While electronic car sales are growing fast, lithium ion car 
batteries last eight to 10 years on average, meaning it will be 
the best part of a decade before significant numbers are spent. 
    American Manganese's Reaugh says it is planning to focus 
initially on recycling material from faulty batteries to get 
around the wait for working batteries to expire.   
    Even when they do, battery makers say many will have a 
second life as grid storage, potentially for the best part of 
another decade. German carmaker BMW  BMWG.DE , for example, says 
its batteries are specifically designed for that purpose. 
    Grid storage systems use batteries no longer performing at 
levels to power cars to store electricity which can be used to 
even out fluctuations in supply and demand. 
    Still, not everyone is convinced grid storage will put the 
brakes on recycling. 
    "At the end of the day it's going to come down to whether 
the raw materials in the battery are worth more than the battery 
as grid storage," CRU analyst George Heppel said. "I think there 
will be a better incentive to recycle the materials, and from 
there build a more efficient battery with new technology." 
    Umicore says it expects volumes of spent batteries to rise 
above 100,000 tonnes a year in the next decade, with "massive 
volumes" coming onto the market around 2025. Once that happens, 
the opportunities for recyclers to capitalise will take off.  
    "It definitely is a market that could become materially 
important," said portfolio manager Bischoff. "We've looked at 
it, and we'll look at it again." 
 
    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 
GRAPHIC-Forecast demand growth for lithium ion battery materials 
   http://reut.rs/2zzGHaG 
GRAPHIC-Electric vehicles on the rise    http://tmsnrt.rs/2eNwQoZ 
INSIGHT-China's recyclers eye looming electric vehicle battery 
mountain     urn:newsml:reuters.com:*:nL4N1LT325 
FEATURE-Argentina seeks to overtake Chile in South America 
lithium race     urn:newsml:reuters.com:*:nL8N1NJ6XJ 
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> 
 (Reporting by Jan Harvey; editing by David Clarke) 
 ((jan.harvey@thomsonreuters.com; +44 0 207 542 7744; Reuters 
Messaging: jan.harvey.thomsonreuters.com@reuters.net; Twitter: http://twitter.com/Jan_ReutersGold)) 
 
Keywords: BATTERIES RECYCLING/