Albemarle sees strong future in recycling, growing Australian lithium output

Albemarle Corp. is looking at both ends of the battery life cycle to meet future lithium demand and believes that recycling will eventually overtake mining as the main source of supply.

Recycling is "a critical area of focus for going forward," said Beverley East, Albemarle's country manager and vice president of external affairs.

"It may seem a stretch, but we have scenarios when recycling actually becomes eventually the dominant source for lithium going forward, as the economics of mining may dwindle, and the demand for sustainability drives growth in innovation. Recycling will be the way we produce the majority of the lithium going forward," East told an Oct. 26 Western Australia Mining Club function in Perth.

At the same time, Albemarle remains committed to growing lithium production in Western Australia despite the collapse of its A$6.6 billion bid for Liontown Resources Ltd. The US company will have spent "well over" A$4 billion on downstream lithium conversion in Western Australia once the expansion at the Kemerton lithium hydroxide processing plant is complete, East said.

"Albemarle has taken a keen interest in this state as a significant part of our strategic growth strategy — largely because the quality and the scale of the resources discovered here and emerging here are tremendous," East said.

With a large stake in the Greenbushes mine and the huge spend on Kemerton, Albemarle is "already all-in [on Australia]. Selling lithium today is a good way to make money, but thinking more broadly, in the sustainability of the industry, recycling will play a growing role. They're not mutually exclusive," Canaccord Genuity mining analyst Reg Spencer said of Albemarle's strategy of investing at both ends of the lithium value chain.

Recycling on EV market saturation

Albemarle is looking at current and novel technologies to recycle lithium from spent EV batteries, with a "vision [that] would see the development of a continuous loop" to recycle them back to being battery-grade lithium, East said. A partnership signed with Ford Motor Co. in May includes collaboration on how to "put together a closed loop recycling system concept ... and put it to market," East said.

Evolving battery chemistries will change the economics of recycling over time, said Adrian Griffin, who founded Lithium Australia Ltd. and was in charge when it acquired battery recycler Envirostream Australia Pty. Ltd. in 2022.

"There is a reasonably high value of contained metal in [nickel-manganese-cobalt] batteries, so there is incentive to recycle those, and much of your recycling will be paid for out of cobalt. The problem with that is that cobalt is being weaned out of the battery market, so then you'll need to rely on revenue from lithium, nickel and manganese," Griffin told S&P Global Commodity Insights.

"The EV market is expanding more rapidly than spent batteries come back for recycling as most EVs come with an eight-year warranty for the batteries. You just can't catch up. When it will make sense for much of the gap to be covered by recycling is when the EV market is saturated," Griffin told Commodity Insights, though he does not know when that will happen.

Spencer said "there is a long way to go" for the EV market to reach that point; however, "recycling will have to play a prominent role in global supply, otherwise we're just not going to have enough lithium to support the mass adoption of EVs."

The International Energy Agency estimates 14 million EVs will be sold this year, representing 18% of new car sales.

Growing research and development

Beyond recycling, Albemarle is exploring new technologies involving solid-state batteries for potential to power long-distance trucking, aviation and even shipping.

"Today, the lithium-ion batteries use lithium materials mainly in the cathodes and the liquid electrolytes," East said. "We're looking at a future that will include their use in anodes and solid electrolytes."

"Our work on anodes includes lithium metals, which are under 20 microns in size, which is about half the thickness of a human hair," the executive added. "It's going to make batteries more energy dense, as well as lighter, safer and faster charging."

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