Companies now looking for electric battery metals in the garbage

Soaring cobalt and lithium prices are not just spurring an exploration frenzy as more and more companies want a piece of the attractive batteries metals pie, but they are also pushing some companies to look for them where others have not.

Australian Neometals (ASX:NMT), which is building a plant to recover raw materials including lithium, cobalt, nickel and copper from expired batteries in Canada, is one of those firms.

The Perth-based miner, which only last week acquired a lithium project near Kalgoorlie, in Western Australia, for $2.5 million, expects to demonstrate that recycling the currently coveted metals from used electric vehicle batteries can be even more profitable than mining them.

Neometals, which is building a plant to recover raw materials including lithium, cobalt, nickel and copper from expired batteries in Canada, is one of them.

“The world needs recycling to stop us drowning in batteries, and it also has the potential to produce components at a lower cost,” chief operating officer Mike Tamlin told Bloomberg. “What we are hoping to prove in the pilot plant is that it does provide a better net margin.”

Neometals is not alone. An increasing number of firms are looking at extracting lithium and cobalt from used mobile phones, laptops and other high tech gadgets.

China’s Tianqi Lithium Industries, which kicked off last year construction of an A$400 million ($310 million) processing plant in Australia and which it aims to open later this year, is also considering research and development work on recycling.

Last month, Samsung SDI, South Korea’s leading battery maker, unveiled plans to do just that and also to develop lithium-ion batteries with minimum content of the metal, or no cobalt at all, as a way to offset soaring prices for the silver-grey commodity.

The company, an affiliate of Samsung Electronics, has already started tweaking the recipe for its electric vehicles (EV) batteries and says is ready to produce one with nickel content above 90%, but that is only 5% cobalt.

And once cobalt supplies from phones stabilize, Samsung SDI said it might follow Toyota Motor and Panasonic in extracting materials from used hybrid electric vehicles.

Companies now looking for electric battery metals in the garbage

Taken from Neometals presentation, March 22, 2018.

Cobalt prices went ballistic last year, with the metal quoted on the London Metal Exchange ending 2017 at $75,500 per tonne, a 129% annual surge sparked by intensifying supply fears and an expected demand spike from battery markets.

If anything, prices for the metal are expected to rise even further this year, as the Democratic Republic of Congo, responsible for more than half the world’s supply, recently hiked its taxes and royalties on the metal.

Cobalt demand from the electric vehicles industry is also forecast to grow from to 95,000 tonnes by 2026 from 12,000 tonnes last year, according to consultancy CRU.

BMW, for one, recently said it believes its needs for car-battery raw materials will grow 10-fold by 2025 and that it had been surprised by "just how quickly demand will accelerate".

Recycling the 1.6 billion used mobile phones said to be wasting away in people’s drawers, could provide cobalt to meet demand from millions of electric vehicles, according to Belgium-based Umicore, one of the largest producers of cathodes for electric car batteries.