This CEO made $250 million from lithium. This is what he then invests in

“I thought, ‘Oh, okay. The good God has given me quite a few shake-ups,’ and I thought, well, this was one of them.”

Taking advantage of his lucky break, Reed made very early and very foresighted investments in Australian lithium mining near his hometown of Kalgoorlie.

Those investments in the Mt Marion mine, now run by Chinese giant Ganfeng and Chris Ellison’s Mineral Resources, were followed by well-timed exits to leave Neometals and its shareholders a small fortune. He made nearly a quarter of a billion dollars from those mines with a $2 million investment.

After some generous dividends, the remaining fortune 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 delivered an early 50th birthday present to Reed this yearwhen they knocked on his door to get their hands on that patented battery recycling process.

Mercedes-Benz signed a preliminary agreement in May with Neometals and its construction partner SMS Group, which provides for the construction of a recycling plant in Kuppenheim, Germany.

The drive to recycle is driven by the desire to secure supply chains for the critical minerals needed for batteries; lithium, cobalt, nickel, copper, aluminum, graphite and sometimes manganese.

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

“Current supply and investment plans for many critical minerals are lagging far behind what is needed to support 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 decarbonisation.

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

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

Neometals’ proprietary process uses acids and other liquids to recover the minerals in a wet or “hydrometallurgical” system.

The wet system differentiates it from the regular “pyrometallurgical” recycling method, where batteries are cooked at high temperatures in giant furnaces.

Mr Reed said his hydrometallurgical process was more expensive than the traditional method at first glance, but recovered dramatically more of the valuable minerals, used much less energy and therefore had a much lower carbon footprint.

Conrad Mulherin, PwC Australia’s Energy Transition Director, agreed that hydrometallurgy could become an increasingly common recycling method in the future.

“Currently, most recyclers use pyrometallurgical processing due to its relatively lower cost. However, pyrometallurgy requires high temperature (which also means high energy consumption) and typically lower recovery rates (meaning higher metal loss),” he said.

“There are some other environmental issues with this approach; Dangerous pollution can be released when plastics and other materials are burned.

“The industry seems to be shifting to hydrometallurgical processing.

“There are fewer energy requirements, less impact from by-products and higher metal recovery rates with hydrometallurgy. The higher metal recovery rates and higher metal prices can make the hydrometallurgy business case more attractive.”

New rules for recycling batteries

Recovery rates and carbon footprint are likely to be much more important once the full impact of the new battery recycling rules passed 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 minimal amounts of recycled cobalt, lead, lithium and nickel and the batteries must bear a label that reveals their carbon footprint.

The IEA estimates that global battery recycling capacity is currently about 180,000 tons per year, nearly half of which is in China.

“We think that around a quarter of a million tons of batteries will need to be recycled in Europe by 2025. Total installed capacity in Europe would currently be around 70,000 tonnes,” said Mr Reed.

“It’s going to be hard for them [recyclers using pyrometallurgy] to grow and be licensed in the new world.

“When the new battery regulations come into effect in Europe, about the middle of the decade, to reach their recycling efficiency or recovery rates, all roads lead to the hydromet process.”

The IEA predicted that recycling would provide up to 12 percent of the global cobalt supply by 2040 in a scenario where the world acted to keep temperature increases well below 2 degrees.

In the same scenario, 7 percent of global nickel demand and 5 percent of lithium and copper demand would be covered by battery recycling.

“Recycling end-of-life lithium-ion batteries to recover the valuable minerals, and to a lesser extent reusing them as second-life batteries, can alleviate some of the burden of extracting them from virgin ores. While this does not eliminate the need for continued investment in primary mineral supply,” the IEA said in the report.

The IEA warned that the wide range of different battery assemblies and designs for electric vehicles could hinder efforts to develop an efficient and economically viable recycling industry.

“Technological bottlenecks include the lack of standardization of designs for battery packs, modules and cells. Different automakers have adopted different battery chemical properties, especially for the cathode, and they tend not to disclose information about their cell designs and chemical properties,” the IEA said in its May 2021 report.

“This wide variety of cell types and chemicals on the market represents a major challenge for recycling, and especially for the automation of recycling processes, as each battery pack and module type requires different approaches to disassembly.”

Neometals’ agreement with Mercedes-Benz becomes legally binding when the automaker sends out an official purchase order, Reed told Tech Zero he expected it to be formalized.

“That is certainly well advanced and on track,” he said.

“We will include staff with them and be able to test the latest and greatest [battery] cells and assemblies of batteries and sizes and co-owns the improvements.

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

‘Very strong pipeline of people who are very interested’

The deal with Mercedes-Benz came after similar agreements with a Canadian steel producer and the Japanese trading house Itochu.

“We have a very, very strong pipeline of people who are very interested in using it, of course, once you announced that Mercedes has chosen you as a technology partner, that certainly accelerated and crystallized a lot of commercial negotiations because they’ve maybe did the deepest technical dive,” Reed says.

“These guys [Mercedes] the inventor of the first modern car, the anti-lock braking system, the safety cage, they are quite innovative.”

But while the Mercedes-Benz deal and new European regulations should boost this decade, Reed believes the battery recycling industry’s days could be in decades to come as the volume of batteries to be recycled is now stays small.

“It’s been an amazing journey, we’ve been going for six years now and we’ve only just started. The battery tsunami only gets really interesting in the second half of the decade,” he said.

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

“It will probably not be 40 to 50 percent until 2040. So it’s a fantastic company with a very, very long life for us.

“Even if they stopped making lithium batteries today, 10 years from now you’ll still have yesterday’s production to recycle. So the fundamentals were just too compelling for us not to apply all our resources.”