Glencore invests $200 million in battery recycling

British-Swiss company Glencore announced a long-term partnership with Li-Cycle, a lithium-ion battery recycling company, today, Thursday, May 5th.

The miner said it would invest $200 million in Canadian company Lee-Cycle as it looks to increase supplies of battery metals needed to make electric cars.

The move comes as governments and companies around the world step up efforts to recycle old batteries into new batteries, which are a potential new source of metal for electric vehicles.

For example, the administration of US President Joe Biden revealed this week that it will allocate $3 billion to support the domestic manufacture of electric car batteries, including battery recycling.

Partnership details

Glencore is making efforts to promote the recycling of batteries for electric vehicles.

The Glencore logo in front of its headquarters in Switzerland – Photo by Reuters

Under the deal, Glencore will invest $200 million in the Canadian company by purchasing a 5-year convertible bond, at $9.95 per share, nearly 38% higher than Lee-Cycle’s closing price on Wednesday, May 4.

The British-Swiss company will get a seat on the board of the Canadian company, based in Toronto, as the latter agreed to nominate the head of the recycling division of Glencore, Kunal Sinha, to its board of directors. The deal is scheduled to expire by next July, according to Reuters.

Glencore will supply Li-Cycle’s black block, which is damaged batteries that can be processed to extract metals, such as cobalt and nickel, as well as to manufacture scrap, which will contribute to the Canadian company getting more raw materials for recycling.

The manufacturing process of electric vehicle batteries generates between 5% and 10% of manufacturing waste, and Li-Cycle builds several recycling facilities around North America. The company also plans to use Glencore’s investments in the development of these projects and for other purposes.

It is noteworthy that LG Chem – the largest chemical company in South Korea – and the US company Coke Industries, among the investors in the company “Li-Cycle”.

Electric car battery recycling
Workers sort lithium batteries at a recycling facility in Canada – Photo courtesy of the Financial Times

redevelopment race

The deal is the latest between mining giants and recycling companies. In March, French mining company Eramet strengthened its cooperation with Suez to develop a facility in France to recycle electric car batteries by 2024.

Meanwhile, electric car makers and miners are racing to control key supplies responsible for the world’s shift to cleaner energy sources.

Automakers and industry analysts expect redeveloped batteries to play a vital role in addressing long-term supply constraints. Additionally, recycling can help control rising commodity prices, which threaten to increase the cost of batteries.

According to Bloomberg’s Energy and Data Analysis Unit, approximately 27 million electric vehicles are expected to be purchased by 2030, and landfills will accommodate approximately 1.7 million tons of scrap batteries.

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