Host: Welcome to another episode of Aqua Metals Deep Dive, the podcast where we discuss company updates and other topics in the world of lithium battery recycling. We are joined by the President and CEO of Aqua Metals, Steve Cotton. Today’s discussion will cover Aqua Metals recent announcement and expansion of production plans for the company’s Sierra ARC recycling campus. With plenty to discuss, let’s dive right in.
Welcome, Steve. Aqua Metals has just announced a major expansion of its lithium battery recycling strategy. What prompted this shift and why is it the right move right now?
Steve Cotton, CEO: Yes, it’s definitely both the right move to make right now and I’ll tell you why. First, this is a proactive and strategic acceleration of our plan rather than a reaction to chellenges. So in other words, we’re not just reacting to market conditions, we’re actually staying ahead of them and that’s because the evolving market conditions have made it financially advantageous to prioritize higher throughput, battery grade lithium carbonate and MHP production.
Our original road map included full metals refining right away and that remains part of our longer term plan for the Sierra ARC campus. But by prioritizing lithium carbonate and MHP at scale, today, we are creating a faster and more efficient path to achieving that goal. So in summary, this path forward enables quicker and de risk time to market with faster revenue generation and a lower CapEx cost path to commercialization. Which we believe is greater industry alignment. The critical mineral markets are constantly evolving and our unique technology allows us to be adaptable. So by focusing on producing quite a bit more of the first two highest demand materials and sooner, we can build a stronger business that supports the additional full. And battery material refining in the next phase.
Host: This is a great announcement that I’m sure people will be excited about. Investors and stake holders may be wondering, though, how does this change mean Aqua Metals will approach its full refining ambitions in the future?
Steve Cotton, CEO: So in today’s market and global industry environment, the smartest path for us is to start with lithium carbonate and MHP production at scale. This builds immediate revenue, so we can then take the next step to full refining, just in serial order now. So this is really an interesting stepping stone rather than a sidestep. We have determined that the strategy is a faster time to market at greater scale as we progress then towards full domestic production. The strategy also does another really important thing for us. It proves our AquaRefining at full industrial scale, making it also a faster time to market to license our technologies and commercialize the company further. The beauty of AquaRefining is its flexibility. We can pivot quickly as we are with this announcement as industry needs will likely continue to shift and this strategy puts us in a stronger position to grow into full refining and battery ready materials in the future.
Host: The broader battery materials industry certainly is evolving quickly. A major challenge for US battery recyclers has been achieving battery grade materials cost effectively. How does this new approach strengthen Aqua metals position and financial future?
Steve Cotton, CEO: This plan significantly reduces the upfront capital needed to scale, allowing us to generate revenue faster and prove out the business model at industrial scale, which then unlocks many more opportunities for the company. So in other words. Lower CapEx faster payback. It’s more attractive to financiers. This approach best aligns with what investors and strategic partners that we are talking to are looking for – scalability, efficiency, and near term profitability. So we have structured this plan to be profitable even at today’s lower mineral prices, which means any market improvements will only add to our long term upside with profitability and payback time even further improving as market conditions could improve.
Host: That is great. Thank you. And certainly provides a number of positive indicators for the future. As we zoom out and look at the broader picture, how does this new strategy align with global battery supply chain trends and US domestic policy?
Steve Cotton, CEO: Well, there is no argument that the US desperately needs a strong domestic critical mineral supply chain and Aqua metals is building that capability with scalable and low cost production of key materials. U.S. policy is pushing for more domestic critical mineral production and Aqua metals is now one of the few companies actively scaling production of these battery grade. We believe that Aqua metals is already the only recycler with demonstrated an OEM validated battery grade lithium carbonate capabilities and our fundamental economics by using electricity to regenerate the chemicals we need versus one time use chemicals and massive undesirable waste streams gives us a distinct and key advantage. And in addition to lithium carbonate, MHP is also a globally traded product, meaning Aqua Metals can serve both domestic and international demand. While positioning itself for further US expansion as the industry grows further domestically with each part of the ecosystem. This move ensures that the US supply chain remains competitive with global players, including China, and our success contributes to securing more of the lithium battery supply chain right here in North America.
Host: Thank you, Steve. One closing question for our investors and shareholders, what does this announcement mean for the long-term vision of Aqua metals?
Steve Cotton, CEO: So the long-term vision remains the same. A fully integrated, low cost, low carbon supply chain for lithium battery materials that, by the way, produces great jobs. This step just gets us there faster and with better economics. The company is on track to becoming a key supplier of low carbon US produced critical minerals. So in summary, we are executing today to build a stronger future more quickly for US critical minerals production. This move ensures we can grow efficiently while maintaining our leadership in clean, sustainable battery recycling.
