How Can We Reduce the Costs of Battery Recycling?

­Singaporean-based commodities company Trafigura just signed a massive $1.1 billion, 10-year offtake agreement with US-based refiner Nth Cycle. The goal – to recover 2,000 metric tons of nickel in mixed hydroxide precipitate and 1,500 metric tons of lithium carbonate from mostly lithium-ion batteries and some manufacturing scrap.

Apparently, these critical minerals will come from 12,000 metric tons of battery “black mass,” and indeed, the need for staunch action on e-waste has never been greater.

According to the World Health Organization, at least 62 million tons of e-waste is produced globally each year, and only 22% is actually properly recycled. The Environmental Protection Agency places it closer to 25%, but either way, the message is clear – a colossal amount of e-waste isn’t properly disposed of, with dire environmental and fiscal consequences.

The situation is even bleaker if we drill down to just lithium-ion batteries, where, depending on the source, only 1-5% is actually recycled. And it just so happens that li-ion batteries may present the biggest ecological risk.

Used lithium-ion batteries not only leak toxic chemicals – like lithium, cobalt, and nickel – into the ground and water, leading to potential cancer and birth defects, but their improper disposal can lead to thermal runaway, a major fire hazard.

On the other hand, these spent batteries are a potential goldmine, with cobalt, nickel, copper, aluminum, lithium, and other critical minerals like graphite and manganese recoverable.

So why is such a miniscule percentage of li-ion batteries recycled? In a word, cost. Most of the relevant critical minerals are far cheaper to mine than recover from spent batteries. In the case of lithium, it’s about five times cheaper to produce anew than extract via recycling.

That said, emerging trends can bring costs down, starting with the recycling method – as things stand, direct recycling (which keeps the cathode structure intact) is considered the most economically feasible option, anywhere from $0.9–4.1/kg, though hydrometallurgical processing also offers low energy consumption and high recovery rates.

Scale also matters. A lot. While scaling up the battery recycling business can bring down costs the traditional way, Nth Cycle is taking a smaller, more modular approach.

According to the U.S.-based refiner, “Traditional metal refineries assume the risk of large, fixed volumes, lengthy permitting timelines, and require billions in upfront investment.”

By contrast, their Oyster system’s “modular, compact design deploys virtually anywhere, reduces build time from five or more years to under two, capital intensity by up to 70%, and produces competitive margins.”

As part of its agreement with Trafigura, Nth Cycle plans to establish new facilities in in South Carolina and the Netherlands, and operations should begin in 2028.