Lead-acid batteries (LABs) will continue to coexist with their lithium-ion counterparts for the time being, although growth in the latter will rapidly escalate in the coming years, the president and chief executive officer of Aqua Metals said.

Steve Cotton told Fastmarkets that the energy storage industry was growing at a very rapid clip in support of the electrification of transportation, allowing LABs – which are integral to batteries for vehicles, provide backup power for hospitals, electrify households, and are the primary energy storage mode for buildings, data centers and telecom – to still play a key role.

“My 2015 Tesla electric vehicle (EV) contains its fourth LAB; the lithium-ion pack propels the vehicle forward, the LAB does everything else. So, the LAB industry will continue to maintain and grow but at much more of a mature industry clip, with forecasts of around 3-4% cumulative annual growth globally,” he said in an interview.

“In the meantime, the lithium industry and metals associated with lithium-ion batteries are seeing demand grow at 30-40% annually and are expected to meet, and then exceed, the LAB industry in dollar value of those metals by mid-to-late decade,” he noted.

“We see a peaceful coexistence for the time being, and then ultimately we’ll see where battery chemistries go in the future,” he added.

Tightening emissions regulations have forced many smelters to close, leading companies to seek a cleaner and more cost-efficient lead recovery and recycling method. Since 2015, Aqua Metals has developed AquaRefining, a recycling technology using a clean, closed-loop process that can produce ultra-high purity metal.

The company’s roots are in LABs, but more recently, it set its sights on meeting the lithium-ion battery markets to serve the growing demand for critical metals driven by innovations in batteries, growth in internet data centers and alternative energy applications, including solar, wind and grid-scale storage.

Early phase testing shows promise for applying AquaRefining methodology, used for plating ultra-high-purity lead, to plating the metals found in lithium-ion batteries such as cobalt, nickel and copper. Lithium and manganese will be recovered in other forms, Cotton said.

The company has been awarded 68 patents, with 49 pending patents for its AquaRefining process, and has filed a provisional patent for recovering high-value metals from recycled lithium-ion batteries. It offers equipment supply, services and licensing of the AquaRefining technology to recyclers across the globe; as Cotton noted, Aqua Metals can configure its technology for different scenarios, offering a kind of “multiple-choice option.”

“Through 2020 and 2021, we’ve been doing more research and development on how we apply AquaRefining to metals other than lead. The most obvious place to focus was on energy storage and lithium-ion battery recycling,” he said.


Lithium-ion Batteries

The challenge facing the lithium-ion battery sector is that it isn’t a closed loop, Cotton said, pointing out that 93% of lithium-ion batteries go into landfills, with the remainder recycled via smelting processes.

“The headwind is, how will the industry close the loop and really mimic what the lead industry has been going for, which is that the loop has been closed, given that about 99% of lead is recycled,” he added.

Cotton estimated that by 2030, the world will need to recycle an estimated 15 million tonnes of end-of-life lithium-ion batteries.

“There’s definitely more material to be recycled than recycling capacity already. It’s a matter of how quickly new, emerging lithium-ion battery recyclers can be operating,” he said.

“As we well know, it takes years to get a plant up to its full scale and intended volume, so therefore, a facility that gets turned on today will reach the panacea of its projected capacity in four to five years’ time,” he told Fastmarkets.

One such facility is owned by LINICO Corporation (LiNiCo), a United States-based cleantech startup focused on creating environmentally sustainable technologies for lithium-ion battery recycling that leased to buy Aqua Metals’ original AquaRefining facility in McCarran, in the US state of Nevada, earlier this year.

Driven by Aqua Metals’ accelerated focus on its capital-light equipment supply and licensing strategy, the company now has a collaborative agreement with LiNiCo to source lithium-ion feedstock from battery manufacturing scrap and end-of-life cells from various sources.

Under the agreement, LiNiCo will process the feedstock into black mass, which will in turn be used as input feedstock for Aqua Metals’ AquaRefining pilot cells to create high-purity metals such as nickel, cobalt and copper as well as other compounds.

“The goal is to have the first full-size circuit on the ground at LiNiCo by late 2022, early 2023 – it will reach scale mid-decade and beyond,” Cotton said.

“That’s pretty quick, to invent and build an industry. The industry is going to be building while it’s being invented,” he added.

Aqua Metals is setting up a pilot line at its recently established innovation center in Tahoe Reno Industrial Center in Nevada, where it is headquartered.


Steel, Other Metals

Eventually, Cotton said, the company will look at the possible application of its technology to more metals, including steel, precious metals and rare earths.

“Since we’re the only company plating metals, the steel industry is very interested in getting pure nickel and pure cobalt. Our operator partners that we enable will have an interesting offtake proposition in terms of who they contract with – the steel or battery industry or both?” he said.

“If you’re crushing consumer electronics with the batteries in them, instead of taking the batteries out and doing a labor-intensive sorting process, there’s a whole new slew of metals in that black mass such as gold, silver and rare earths,” he added.

The company also sees opportunities to apply its technology to remining tailings, combining a sustainability benefit with gathering the critical minerals necessary for the supply chain.

“We can look at the size of the market and the opportunity and decide if we want to pursue it,” he said.

“The steel sector, for instance, is looking at what can be done to process the metals contained in the steel flue dust. We see pathways into other verticals and industries for sure,” he added.

Although there is a lower margin in recycling lithium iron phosphate (LFP) batteries given the lower iron value, Cotton said it would still be economically viable.

“We’ve already proven that, at $2,000 per tonne, lead is worth recycling, so I believe LFP batteries will still have that economic value, and there will be a peaceful coexistence between LFP batteries and other battery types for quite a long time,” Cotton said.

“The performance vehicles will have the cobalt and nickel, and the EV for everyone will have LFP batteries with less range but a better cost structure to make it affordable. It’ll always be a blend – what’s really neat about our technology is that it doesn’t matter about the composition of the black mass, we just go after the metals and plate them,” he added.


Carrot and Stick

According to Cotton, it ultimately won’t matter how large margins in battery recycling are because it will be mandated by governments around the world.

“Everything has to have a closed loop, and governments are going to force it, so whether it’s economic or not, someone is going to have to recycle and recover those metals,” he told Fastmarkets.

Funding for the energy transition will likely come from public-private partnerships, with the carrot, or reward, and stick, or punishment, coming from governments.

“The stick in Europe, for instance, is that you must extract a certain percentage of metals from recycled batteries, which by its very nature is saying, don’t smelt by a certain date because you won’t be able to extract that percentage,” Cotton said.

“But the carrot comes because governments will have to support and provide incentives, which will be through grants, in addition to private-sector investment,” he added.

Consortia will meanwhile be important, linking the mining sector with the rest of the battery supply chain including automakers, cell manufacturers, recyclers and recycling enablers, Cotton noted.

“If you look at the demand curve [for metals] relative to what mining is going to be able to fulfil, it’s not going to make it. The only way to get there is recycling, which will create more value for those metals,” Cotton said.