US-based battery recycler ACE Green Recycling has been focusing on the US market, particularly its upcoming Texas recycling site, and plans to run its lead-acid and lithium-iron-phosphate (LFP) battery recycling operations alongside each other in Texas.
Argus spoke with ACE Green Recycling's vice-president of investments and strategy, Aaron Wee, about their Texas site, battery recycling gate fees in Europe and the black mass market. The interview is split into two parts and part two's edited highlights follow:
What's your view on the US market?
The US market for lead is [one of] the most attractive market in the world. It's where you can find possibly some of the cheapest scrap batteries for lead, and also get some of the highest premiums on refined and alloyed lead. In terms of lithium, obviously the US is either the second- or the third-largest economy for [electric vehicles] and lithium batteries in general.
Nowadays, with the improvements in LFP battery technology, the range and energy density problems of the past are now not really an issue. We sort of predicted the shift towards LFP quite some time ago.
Back when the recyclers were concerned about nickel-manganese-cobalt (NMC) because we're going to get nickel, we're going to get cobalt. That was a relatively easy win for a lot of recyclers. But for us, LFP was always going to be the battery of the future.
In fact, in our Texas project, we've already [begun the process of acquiring] the land and the facilities to combine both our battery recycling technology stacks and to co-locate them in a single location. But lead will start first because lead is going to make money tomorrow. LFP might take a little bit of time before feedstock actually comes in.
What does ACE think of gate fees, especially in Europe? Does it distort the long-term consideration when setting up battery recycling operations?
From a commercial point of view, I think depending on the battery type, that would be €500-800/t of batteries for gate fees in Europe. This may or may not hold over the next couple of years as more recycling capabilities are deployed in Europe.
We won't say no to just getting money to recycle them. But our ultimate goal is not to rely on gate fees as a commercial strategy. Moving forward, I don't think any company can rely on gate fees as a strategy. It just won't be tenable.
Eventually, somebody's going to be able to do it cheaper and better than you. And if you rely on gate fees, that's the end game right there.
Gate fees are usually correlated with the price of lithium. [If] the price of lithium goes up, then recyclers won't [need to] rely on [gate fees]. Chances are we're going to be looking at maybe $12,000/t of lithium carbonate, [or] maybe $11,000 by the end of this year.
What does ACE feel about the current pricing mechanism of black mass, battery scrap or even lithium?
The correlation between lithium prices and black mass is very strong. But black mass as a commodity is a little bit trickier to export to China because of the regulations. Once they accept black mass [imports], especially LFP black mass, that will have a significant change. There will also perhaps be a fall in prices in the rest of the world because now they can sell to China, not just internally in their own domestic markets.
Depending on how trade barriers may or may not come up over the next couple of months, we should see a shift in how black mass is priced.
