ASX-listed Neometals’ joint venture Primobius has expanded a technology and battery recycling JV option agreement with leading steel producer Stelco Holdings to allow it time to buy into its lithium-ion battery special purpose vehicle.
The amendment follows a 2021 agreement for the duo to establish a long-term commercial recycling relationship in North America – one of the fastest growing sectors in terms of lithium-ion battery production.
Primobius GmbH is a jointly held company between Neometals and leading German engineering outfit SMS Group with the partners holding equal ownership rights to the offspring joint venture company Primobius.
The special purpose vehicle, or "SPV," will be used to source significant quantities of end-of-life automobiles as scrap steel feedstocks under the terms of the deal that Primobius GmbH and Stelco originally inked about two years ago. The group plans on recycling lithium-ion batteries in a proposed 50 tonne per day operation at Stelco’s Lake Erie Works hydrometallurgical refinery in Ontario, Canada.
Neometals said at the time of the original agreement that the union would allow each party to play to their respective strengths with Stelco focusing on the SPV’s feedstock and approval work whilst Primobius oversees demonstration trials, engineering studies and its commercial disposal operation in Germany.
Under the revised treaty Primobius picks up the right to obtain between 25 and 50 per cent of the equity in the Stelco special purpose vehicle on or before 31 December 2023.
Neometal's recent venture appears to be strategically focused on meeting the safe battery recycling and disposal needs of the white-hot electric vehicle market, an industry that global accounting firm Deloitte predicts will increase at a compound annual growth rate of 29 per cent over the next decade.
In a sign of the times, electric vehicle juggernaut Tesla Corporation recently tabled its 2022 sales figures that pointed to 1.3 million car sales globally. The metric is a new record for the company and eclipses the 900,000 plus sold in 2021.
The recycling of lithium-ion batteries is quickly becoming an important factor for manufacturers as demand for electric vehicles continues to grow at unprecedented rates. The statistic means companies with battery recycling facilities such as Neometals could play a massive part in treating end-of-life devices, particularly in regions experiencing significant adoption rates such as North America.
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By Matt Birney
