Battery Metals

This week, HG Ventures, an investment arm of The Heritage Group, and American Rare Earth LLC, a subsidiary of the American Resources Corporation (NASDAQ: AREC), announced they are teaming up to scale up the recycling of batteries, magnets and e-waste with the goal of recovering and supplying critical minerals and rare earth metals to US and global markets.

Mining rare earths, essential elements to realizing an electrified economy, can be challenging as materials needed are either not yet mined, or are latent, stranded, for example, in old coal mines – environmental legacy liabilities spread all over North America.

The Heritage Group, which owns Retriev Technologies, the largest lithium-ion battery recycler in North America, and American Resources, one of the largest owners of mining infrastructure and related assets in Eastern Kentucky and West Virginia, are aiming to solve this problem via the proxy partnership by using legacy tailings from coal mines in the vast Appalachia coal mining region of the eastern US to strip out rare earths and recycle them in a new facility being built in Noblesville, Indiana.

American Resources in November 2021 announced it received the final permit approval for its initial rare earth and critical element isolation and purification facility currently being constructed and set to be operational in Q1 2022.

In December, the West Virginia Economic Development Authority approved the issuance of $45 million in revenue bonds for American Resources’ Wyoming County Coal complex in West Virginia.

“What we do is take big legacy assets and restructure and reposition them, to monetize the entire asset base focusing on infrastructure electrification,” Mark Jansen, CEO of American Resources, told MINING.com. “We acquire legacy liabilities [that] most don’t know how to deal with [and] take these acid mining drainage sites and through a series of technologies we modify the by-product economics.”

The process consists of capturing end-of-life windmill generators, EV motors, lithium-ion batteries / black mass, and carbon-based deposit feedstock, and then digesting them to a type of salt which is later on processed through separation displacement chromatography to isolate and purify the individual elements.

Once this pilot plant yields results, the company wants to build a purification commercial facility that is expected to operate up to 12 production trains and produce over 3 million kilos of rare earth elements.

“We’re modifying either the carbon in the process or the carbon processing, and with that, adding on our rare earths technologies to be in line with our existing coal properties to produce rare earth concentrate,” Jansen said.

“We want to be part of the supply chain that’s definitely needed right now — while using the environmental liability through coal mining to find high-value ways to strip out rare earths in an economical way, which is a challenge. Through that, we built up a technology process chain that has pivoted us to more of a circular economy where we focus on recycling existing magnets.”

Jonathan Schalliol, director at HG Ventures, the venture capitalist investment arm of Heritage Group, said the parent company has operating companies predominantly in North America but also in Europe and China in environmental services, construction and materials and specialty chemicals.

“We are investing in companies, trying to figure out how to help move the American rare earths industry forward,” Schalliol told MINING.com.

“We invest what we see as the future of the industry — we are looking for a sustainable future in materials infrastructure, environmental solutions and industrial systems and also to invest in battery manufacturers,” he said.

Schalliol said HG Ventures brings know-how for recycling and processing materials, and they are targeting 36% concentrate high-value magnets.

Jansen said that to enter the supply chain, you need the ores or the magnets, and also the technology, and that key to their business is the final stage isolation and purification technology to produce that product that goes into the magnets or the cathode.

“Our technology can take any form of concentrate – in the coal industry you can produce concentrate at parts per million and we can take it and isolate it and purify it and make a high value rare earth product,” Jansen said, adding that this can be done with any ore from any mining operation.

“In the United States today, there’s no one who is isolating and purifying those elements at a cost competitive number, substantially below China because of the technology,” Jansen said.

“The environmental side of it is how we cannot only process from the feed stock of carbon, but the waste management of waste batteries – our facilities are able to process all that feed stock,” Jansen said.

“The concept of concentration is a big deal – going after the high-value concentrate — that’s the key driver,” he said. “The mining industry needs to do a better job of utilizing innovative technologies [as a way] of looking to clean up environmental liabilities.”

Indonesia’s pledge to be more than a raw-materials supplier is set to pile pressure on China’s steel to electric vehicles industries that are already grappling with rising cost volatility.

The Southeast Asian country said Wednesday it’s studying a progressive levy on exports of nickel pig iron and ferronickel that could be imposed as soon as this year. Concerns about lower shipments from the world’s biggest nickel supplier sent the London Metal Exchange benchmark surging to the highest in more than a decade. That risks increasing costs for Chinese stainless steel mills — the top users — as well as joining a raft of commodities that are becoming an increasing headache for battery makers as prices climb.

Indonesia has played a key role in global markets as a bulk materials supplier, but President Joko Widodo has pledged to eventually stop exports of all raw commodities to turn the country into a major manufacturing hub for electric transportation. The government signaled in September that nickel restrictions were looming, and has said it will halt bauxite and copper ore shipments, with the ultimate goal of producing all EV components including lithium batteries onshore.

The core concern for Chinese industries is their reliance on Indonesia for supply of ferronickel, a semi-refined product used to make stainless steel. The country gets about 84% of its imports from Indonesia, with Japan, Colombia, Myanmar and New Caledonia accounting for the rest.

While the specifics such as timing and tax rates remain uncertain, Chinese mills will have to accept the “reality” of higher costs due to the industry’s reliance on Indonesia, said Celia Wang, an analyst with researcher Mysteel Global. Higher nickel prices also bring additional pain to battery producers, which are already “very uncomfortable” with high raw materials costs, she said.

Battery metals are in the throes of an unprecedented boom amid a global push to mitigate climate change, with lithium surging to a record and cobalt doubling in the past year. The persistent rally may push up the cost of a battery for the first time since at least 2010, hurting automakers and risking putting consumers off purchasing an EV, according to BloombergNEF.

Indonesia’s domestic focus may spur more overseas investment for the downstream sector, according to Lynn Zhang, analyst at Shanghai Metals Market. The government said in September that a EV battery plant jointly owned by Hyundai Motor Group and LG Energy Solution will start output in May.

Nickel has been a key focus for Tesla Inc., with billionaire boss Elon Musk previously expressing concern about future supply due to challenges in sustainable sourcing and because demand is set to skyrocket as the world increasingly moves toward EVs. The metal was roiled last year due to breakthrough technology developed by Tsingshan Holding Group Co., the world’s biggest stainless steel producer, that allows it to use its existing Indonesian smelters to supply large quantities of a product that can be processed into battery-grade material.

Base metals broadly declined. Nickel on the London Metal Exchange fell 1.1% to $21,820 a ton by 2:32 p.m. in Shanghai after touching the highest since August 2011 on Wednesday. Copper dropped 1.4% and aluminum declined 1.1%.

Nickel price surged to the highest in a decade on Wednesday as investors bet automakers will have to scramble to secure supplies for their electric vehicle batteries as inventories dwindle.

Nickel was the top performer among industrial metals, which also rallied as worries eased about economic growth in top metals consumer China.

Three-month nickel on the London Metal Exchange jumped as much as 4.4% to $22,745 a tonne, the highest since August 2011. It had pared gains to $22,610 by 1130 GMT, up 3.7%.

“The battery king nickel has been the initial driver, breaking above that $21,000 level, gapping higher, and now the rally is filtering through to copper and the others,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

“The focus in China is moving away from worries about the property sector slowdown to increased signs that they are going to provide stimulus and support to the economy, some of which will benefit industrial metals.”

In China, nickel prices leapt to a record high, with the February contract on the Shanghai Futures Exchange ending daytime trading 3.8% higher at 162,340 yuan ($25,510) a tonne.

A Singapore-based trader said that inventories were running low partly due to restocking by Chinese stainless steel mills.

Nickel stocks in LME warehouses have halved over the past five months to 99,462 tonnes, their lowest levels since December 2019, while refined nickel inventories in ShFE warehouses held close to a record low of 4,455 tonnes hit in August 2021.

LME cash nickel was at a premium of $192 a tonne over the three-month contract, its highest since October 2019, indicating tight nearby supplies.

Analysts at Goldman Sachs forecast the nickel market to be in a 30,000 tonne deficit in 2022, up from their August forecast of a 13,000 tonne deficit.

The iron ore price rose on Tuesday on growing hopes of a recovery for steel demand in China.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $129.17 a tonne during morning trading, up 3.2% compared to Monday’s closing.

Benchmark iron ore futures on the Dalian Commodity Exchange ended up 2.8% to 724 yuan per tonne.

“Domestic stainless steel firms are stepping up maintenance in the first quarter, while affected by the Spring Festival holidays and Beijing Winter Olympics; overall production is expected to be limited,” analysts with Jinrui Futures wrote in a note.

The most-actively traded stainless steel contract on the Shanghai Futures Exchange, for February delivery, jumped as much as 5.3% to 17,920 yuan ($2,812.39) per tonne, closing up 4.4% at 17,760 yuan a tonne.

The China Iron and Steel Association said on Monday China’s 2021 crude steel output was expected to fall to 1.03 billion tonnes from a record of 1.065 billion tonnes, reaching a “supply and demand balance.”

“There’s still room for profits at long-process steel producers to gain, and expectation on resuming steel production and restocking demand before holidays could shore up iron ore prices,” said analysts at Huatai Futures.

France is aiming to raise €1 billion ($1.1 billion) to help secure enough supply of metals for industries like battery manufacturing as prices of raw materials skyrocket.

The plan unveiled Monday includes €500 million in public money, according to the environment and industry ministries. The government wants to reduce reliance on supplies of nickel, cobalt and lithium from outside the European Union, it said.

Procuring enough raw materials for EV batteries that also comply with ethical and ecological standards is becoming a focal point for carmakers, while France has also put pressure on manufacturers Renault SA and Stellantis NV to produce batteries at home. Both companies have taken steps to ensure long-term supply of some of the metals required for output.

The government is calling on the private sector to design projects that could be backed by an investment fund and aimed at bolstering supply chains of metals.

A report submitted to the government Monday by Philippe Varin called for development of battery-metals processing at Dunkirk and for magnets in Lacq, in southwestern France.

It also called for spending on “strategic metals” supply that could include investment in mines.

Campaigners opposing plans for an electric car battery plant which would see an airport close are urging planners to consider alternative sites.

Proposals for the “gigafactory” at Coventry Airport have been submitted and will be considered on Tuesday.

The scheme would see the airfield levelled to make way for the facility.

Losing the site would cause “irreparable damage” to businesses who use it, The Save Coventry Airport group said.

Hundreds of objections have been lodged against the plans including from parish councils, CPRE, the countryside charity and a cross-party parliamentary group which is designed to promote general aviation.

Their concerns include the impact on the green belt, the scale of the development and the loss of the airfield.

But the plans have also been supported by local MPs, unions and the Mayor of the West Midlands, Andy Street.

The Save Coventry Airport group said it represents airport users and aviation enthusiasts and claimed if the airport is closed, it will never be replaced.

Hundreds of people attended an event on Saturday at the site to show their support.

Joshua Mason-Allen, from the group, said they believe there are better sites for the factory.

“When you look at the plans the applicants have submitted, there are alternative sites within the region, so still protecting those jobs, where this site could be built,” he said.

The blueprint has been put forward by Coventry Airport Ltd and Coventry City Council which claimed the factory will create up to 6,000 new jobs.

The facility would manufacture electric car batteries seen as key to the industry as car manufacturers, including JLR, move to producing electric vehicles.

In the plans, the airport and council said an analysis of alternative sites has ruled them out for being too small or not available in the time needed to build the factory which they added is of “a significant urgency” for car producers in the UK.

The outline proposals are due to be examined by Warwick District Council’s planning committee on 11 January and council officials have recommended approving them.