Glencore plans to build Europe’s largest battery recycling plant as it seeks to grow its natural resources business against the backdrop of the switch to electric vehicles.
The Swiss-based company, one of the world’s largest diversified natural resources groups with commodity trading and mining divisions, is collaborating with Canada’s Li-Cycle to build a facility in Italy by 2027. is starting.
The London-listed company with a 10% stake in Li-Cycle is reusing a zinc and lead smelter in Sardinia to produce lithium and nickel, key metals used to make electric vehicle batteries. , which aims to produce cobalt.
Transforming the 94-year-old plant will expand Glencore’s control over the supply of critical raw materials required by automakers.
It will also play a leading role in battery recycling while strengthening its copper, nickel and cobalt mining portfolio. Already, he has established himself as one of the world’s largest metal recyclers.
Glencore Chief Executive Officer Gary Nagle said recycling already contributes $200 million to $250 million to the company’s earnings before interest, taxes, depreciation and amortization, and that by 2022 said it would total $34.1 billion.
He added that the unit’s growth is expected to be “exponential”. This is because tens of millions of EVs around the world are due for recycling between his 8 and 15 years.
Li-Cycle co-founder and chairman Tim Johnston said: “We will need these assets soon.”
Plans at the Sardinia site include recycling disused portable electronics, battery manufacturing scrap and old EV batteries to create sources of lithium, nickel and cobalt.
The plant is capable of processing up to 50,000 to 70,000 tons of batteries of shredded black lumps that undergo a hydrometallurgical process to extract raw materials.
This is enough to recycle 600,000 end-of-life electric vehicle batteries.
Recycling is set to play a key role in easing demand for primary raw materials from mines.
Battery recycling company Li-Cycle predicts that 10% of Europe’s lithium demand will be met by recycled supply by 2030.
EU legislators have proposed that EV batteries must use more than a certain threshold of recycled raw materials from 2030, with 20% cobalt, 10% lithium and 12% nickel in five years. % and a recycling recovery rate is also set. rate target.
Kunal Sinha, head of recycling at Glencore, said the group is intended to meet growing demand from automakers for cyclical metal supplies.
“We will do the research and then we can develop the largest battery recycling hub in Europe,” he said.
However, recycling is risky as it is difficult to predict when large quantities of EV batteries can be processed due to the difficulty in predicting their lifespan in EVs and their secondary use in industries such as energy storage. accompanied.
In North America, Li-Cycle has built a large black bulk processing hub in Rochester, New York. The site is half the size of a planned facility in Sardinia and costs him $485 million.
Costs for the Sardinia plant have yet to be finalized, but both companies say it will be less capital intensive than Rochester because it can use existing infrastructure in Italy to keep prices down.
The site marks an important European expansion for Li-Cycle. There is a shredder site in Germany scheduled to open in mid-2023, followed by more sites in Norway and France.
Under an anticipated 50:50 joint venture agreement, Glencore will provide low-cost capital to Li-Cycle, with Li-Cycle leading the engineering of the plant and repaying the Swiss partner through asset cash flows. increase.
A feasibility study is expected to be completed in mid-2024, and operations are expected to begin in late 2026 or early 2027, subject to a final investment decision.