Lithium Australia ties up in battery recycling with LG Energy in Australia
Lithium Australia Ltd says that its wholly owned subsidiary Envirostream Australia Pty Ltd (Envirostream) -which is leading Australia’s battery recycling industry -has signed a new exclusive three-year recycling agreement with LG Energy Solution to recycle recalled lithium-ion batteries (LIBs) in Australia.
LG Energy Solution is one of the world’s leading battery manufacturers for electric vehicle (EV) and energy storage system (ESS) and is the largest producer of EV batteries outside of China, holding a global market share of ~14% as of 2023.
The agreement is for an initial 3-year term ending in 2027. In addition to recycling revenues received under the agreement, Envirostream has an opportunity to generate additional revenue from the sale of mixed metal dust back to LG Energy Solution (subject to certain collection volumes being met), and will otherwise share in the revenue derived from third party sales of mixed metal dust generated from LIBS supplied by LG Energy Solution.
During the term, Envirostream has the exclusive right to provide battery recycling services for LG Energy Solution’s LIBs in Australia which are subject to a recall.
The agreement is expected to significantly increase Envirostream’s large format LIB collection volumes, leading to greater recycling revenues. There are currently ~6,000 units of LG Energy Solution’s large-format LIBs ready for Envirostream to collect and process under the agreement, and a further ~5,000 units anticipated.
In total, this represents ~770 tonnes of LIB batteries, or ~140% of Envirostream’s total LIB collection volumes in FY23, highlighting the significant LIB collection volume growth the new agreement brings.
The total tonnage of ESS and EV batteries sold is projected to grow between 10% and 40% year on year until 20308, which in turn is expected to result in an increased demand for battery recycling services. This presents a significant market opportunity for Envirostream.
Signing exclusive contracts with leading battery manufacturers is a core part of Envirostream’s national growth strategy, in line with the aompany’s previously identified key priorities of FY24.Envirostream adds it looks forward to leveraging this momentum to win new market leading clients.
