By Kenneth Rapoza, CPA Industry Analyst
American Manganese has a plan: take lithium, cobalt, manganese and nickel waste used to make EV car batteries and recycle them back into car batteries. This is one way to have control of our critical minerals supply and it helps promote a domestic EV battery market, a market that -- for now -- only counts Tesla as a tier one American producer.
It used to be that coal powered industrial society. Then it moved to oil. Then natural gas. Some like nuclear and wind and solar, but neither of those are likely to power your car. Gasoline will. But that’s now. And while we no longer rely on foreign countries to have the oil we need to make gasoline for the combustible engine, we don’t have the rare earth minerals we need to make the batteries powering Tesla M3s and the Nissan Leaf. China does.
What they don’t have in the mainland, they own in African countries like the Congo. It’s processed back home. Need a long-life battery to power your house in 2040? At this rate, it’s probably going to come from China. If it’s not manufactured there, then a majority of the raw materials are processed and refined into battery material. The US would have gone from being dependent on foreign oil, to being dependent on foreign sourced and processed lithium, cobalt, manganese, and nickel to make the lithium-ion batteries expected to power more and more cars in the years ahead.
Passenger EV sales went from a respectable 450,000 in 2015 to 2.1 million in 2019, globally. They will drop this year due to the pandemic, but as battery life improves and more charging stations are built in key markets, then global sales are seen hitting 8.5 million by 2025, based on an market outlook report by BloombergNEF, the business intel unit of Bloomberg. The auto market is where the demand for batteries will come from.
Consider this: between 1928 and 1955, the US government needed manganese to make stronger steel, primarily for the war effort. Most of it came from one mine, Artillery Peak, in Arizona. Canadian firm American Manganese purchased parts of the mine in 2007, which encompasses the historical open-pit and underground mines that were used to supply various steel mills and US government strategic materials stockpiles at the time. They’re a member of CPA, and have an idea of how to tackle the rare earths supply issue that is so important to the burgeoning mega-battery industry.
When American Manganese bought into the Arizona site, they thought they could treat the low-grade manganese using a unique hydrometallurgical process to make it more pure. It worked and was patented. The low prices of manganese put the mining project on hold but in 2016 similar chemical reagents and units of operation used for their Arizona manganese project were tested to treat lithium ion battery cathode material. It gave this small company an idea: where we can’t find these critical materials, let’s recycle those metals out of those batteries and sweep them up off the shop floor as the raw material needed to make the product again.
With encouraging lab tests and new patents, a pilot plant project was set up in the outskirts of Vancounver. They estimate that they will eventually need around $12 million in financing to set up a commercial facility that takes cathode scraps, puts it in what looks like a vat that churns out a granular, sandy material comprised of all the critical materials powering everything from an iPhone battery to a car battery.
That’s the idea.
“Imagine if you had a mountain that you could carve up and it had lithium, cobalt, manganese and nickel all inside? That would be the mine of the century. Everyone would want to own that mine,” says Zarko Meseldzija, American Manganese chief technical officer and a member of CPA.
Industry estimates are that battery manufacturers end up throwing away around 10% metal waste. But by 2025, if you had that 10% waste at every battery manufacturing in the world, the amount of spare metal pieces you would have to recycle would be equal to tens of thousands of tons of lithium, nickel, cobalt and manganese.
“We have demonstrated on a laboratory scale and in a pilot plant scale that we can achieve up to 100% recovery of these valuable cathode metals at a 99.99% purity level,” says Meseldzija. “The other option is high-heat smelting which gives you maybe a 60% recovery rate and environmental complications. We have figured out a way to recycle this and in doing so you reduce the environmental problems, and you lower your supply risk. Recycling is a strategic solution even if you were trimming just 20% off of your reliance on mined and foreign sourced material.”
CPA believes rare earths used for battery metals are part of our critical supply needs. We cannot allow ourselves to be beholden to China, or any other nation, for our energy needs. Nor for the minerals used to manufacture the powerful batteries we expect will be the engines, and the generators, of the not-so-distant future.
American Manganese refers to what they do as “urban mining”.
EV car batteries in the market today are still working out their roughly 10-year life cycle, so the source material is not old batteries, it’s scraps from the manufacturing process at places like LG Chem in Michigan. They did not say where they were getting their scraps from, or with whom they are partnering with at this time, however.
The scraps used in the pilot plant are metallic shavings of materials that were discarded during the manufacturing process. It’s like sawdust on the floor. It gets swept up and sold as waste.
To give it a pop culture spin, think of Star Wars movies for a second. There is always some alien creature making a living off selling some spare metal scraps to the Empire to recycle in order to build more space ships. That’s set to become a real-life, mid to late 21st Century business.
But, if recycling this stuff works – as their pilot program is currently figuring out together with a large battery maker (top secret) -- then American Manganese takes the heat off sourcing and environmental issues all at once. Now they’re practically the green, good guys.
Their business model is to eventually team up with battery manufacturers, and bring their recycling process on-site, or in greenfield facilities nearby.
“We want to be where the recyclable supply is, and that is where the manufacturers are,” he says.
The pilot plant project started in January 2019 with their contract research lab, Kemetco Research, also in British Columbia. They do a lot of the research and development work for American Manganese. The scraps collected from this one battery manufacturer are ultimately turned into a new material and sent back to the battery manufacturer for material validation and potential integration in their own in-house battery manufacturing process.
Batteries are believed to be the future of energy. They are getting bigger and more advanced. Governments can now make aircraft carriers that are battery powered. The Israeli’s military has a battery operated tank. They keep those tanks in the middle of the desert for 12 hours and no one even knows they are there because they have no engine noise.
Elon Musk thinks battery energy will replace fossil fuels. He’s invested millions in Tesla's Gigafacfory in Nevada, with a new one being built in Texas. Companies like Apple spend tens of millions of dollars annually on cathode batteries for their Macbooks and iPhones.
Jeffrey Brian ("JB") Straubel, the original chief technology officer of Tesla, got into the battery metals recycling business in 2017. He founded Redwood Materials, a company that will eventually also manufacture recycled lithium ion batteries at a plant in Nevada.
American Manganese is ready for its “sweet 16 party”. They want to build commercial facilities here in the US.
“American's just became self-sufficient in oil and now the world is moving onto electrification which requires elements like lithium, nickel, manganese, and cobalt. It’s something to watch out for and China has had a couple of years head start in developing process capacity and stockpiles of these critical materials,” Meseldzija says. “Any policy that has to do with supporting the repatriation of critical materials will keep jobs here. Plus, if it makes us less reliant on China, then it’s something worth pursuing.”