Swiss commodity trading and mining company Glencore [GLEN:LN] is partnering with Canadian lithium-ion battery recycler Li-Cycle [LICY:US] to build Europe’s largest battery recycling plant, as reported by Financial Times on May 9. The two companies will study a plan to convert part of an old Glencore lead refinery in Sardinia, an Italian island, into a plant that recycles battery metal such as lithium, nickel, and cobalt. These metals are critical in the production of batteries for electric vehicles (EVs). By converting the refinery plant, Glencore aims to extend its control over the supply of key raw materials needed by automakers and enhance its battery recycling business. Glencore holds a 10% stake in Li-Cycle. 

The collaboration is expected to be a win-win situation where the Swiss company aims to seize circular metal opportunities and Li-Cycle seeks sufficient supply of battery scrap. Last December, EU lawmakers agreed on new rules mandating minimum levels of recycled material to be used in the production of industrial, starter, light and ignition, and EV batteries. From 2030, these levels are set at 16% for cobalt, 6% for lithium, and 6% for nickel, with the percentage rising to 20% for cobalt, 10% for lithium, and 12% for nickel from 2035. Due to the growing demand from automakers, investments are pouring into the battery recycling industry. Industry consultancy, Circular Energy Storage, forecasted that scrap supply may only satisfy a third of recycling capacity by 2025.

Sources:

https://www.ft.com/content/ab593cac-5f7e-4b70-904d-94cc0251aaeb

https://www.bloomberg.com/news/articles/2023-05-09/glencore-plans-to-build-europe-s-biggest-battery-recycling-plant?leadSource=uverify%20wall

https://www.glencore.com/media-and-insights/news/glencore-and-li-cycle-announce-joint-study-to-develop-a-european-recycling-hub

https://www.fastmarkets.com/insights/eu-battery-recycling-targets-face-feedstock-hurdles