(Kitco News) – Winning in the resource space requires settling on a thesis, getting in early and riding out the cycles, said Neometals Managing Director and CEO Christopher Reed.
On Thursday Reed spoke to Kitco from Perth.
Neometals (ASX:NMT) has a suite of technologies in the critical metal space with a focus on sustainable battery recycling. This spring the company was selected to help Mercedes Benz with its recycling. Before serving manufacturers and automakers, Reed and his team were focused on upstream supply.
“We’ve got a long history in lithium when in 2009 we developed the Mount Marion lithium project into one into the world’s second-largest source of feedstock,” said Reed. “With any commodity, you try to pick the long-term thematic. Try and get the better assets and get there early because sometimes you have to hold them through a cycle, and you know it took us two cycles to get Mount Marion developed. “
According to Mount Marion owners, Gangeng Lithium, the mine is the world’s second-largest high-quality spodumene producer. The project was put into production in February 2017 with an annual output of about 450-480 thousand tons of lithium concentrate.
Battery metal recycling has seen lots of well-funded entrants. Li-Cycle received a $100 million investment from Koch Industries in the spring. The company is now building recycling plants throughout North America. Redwood Materials raised $700 million a year ago. The company is helmed by JB Straubel, a Tesla co-founder. Redwood’s Battery Materials Campus 1 will produce 100 GWh of anode copper foil and cathode active material annually by 2025.
While the outlook for electric vehicle penetration is bullish, EVs are still a small fraction of the world’s current total of cars and trucks. Penetration of EVs is expected to hit 30% by the end of the decade. The cars need to be driven and depreciate before being recycled. The average age of a vehicle is over a decade.
Reed said demand is needed now just for production scrap. The high chemistry precision needed from the batteries results in waste that needs to be re-processed, and recycling commitments by automakers require the material to be processed cleanly.
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