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Hyperdrive: The Electric Vehicle Industry Buzzes About 'Black Mass'

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The Rise of Battery Recycling and the Emergence of "Black Mass"

Interest in Battery Recycling Grows as EV Industry Expands

As the global electric-vehicle (EV) industry continues to expand and carmakers and Western governments seek to establish supply chains independent of China, there is a growing interest in battery recycling. One particular term that has gained attention in the industry is "black mass," which refers to the dark, powdery mixture of metals like lithium, cobalt, and nickel that is obtained from recycling spent EV batteries or scrap from battery plants. Black mass is now emerging as a commodity in its own right.

Automakers and Recycling Partnerships

Mentions of black mass in company earnings reports have increased, with notable instances from commodities trader Glencore Plc and chemicals giant BASF SE. Market researchers such as Benchmark Mineral Intelligence, Fastmarkets, and S&P Global have also started providing regular price assessments for black mass since April. Automakers are showing increasing interest in black mass, with companies like BMW AG, Ford Motor Co., and Mercedes-Benz Group AG announcing partnerships or joint ventures to explore EV battery recycling opportunities. For instance, Glencore has partnered with Canadian recycling firm Li-Cycle to process black mass in Italy, while BASF plans to produce black mass in Germany next year.

Challenges and Headwinds

The process of creating black mass involves crushing and shredding batteries or battery cells, extracting unwanted elements, and refining the remaining metallic powder. Currently, the majority of the input material comes from factory scrap generated during battery production. However, there are several challenges to overcome. While recycled materials are expected to account for a significant portion of the global supply of lithium, nickel, and cobalt by the end of the decade, there are concerns regarding the recycling of batteries using lithium-iron-phosphate (LFP) chemistry. LFP chemistry is less attractive for recycling due to lower metal values and technical complexities.

Regulatory and Trading Issues

Another hurdle is the open trading of black mass, which some countries, particularly in Europe, classify as hazardous. This classification raises concerns about packaging, transportation, and trading of the material. Analysts point out that despite the current focus on sustainability, red tape and regulations make lithium-ion battery recycling more challenging in Europe. The industry faces the task of navigating these issues to ensure efficient and sustainable battery recycling practices. In conclusion, as the EV industry continues to grow, battery recycling and the emergence of black mass as a commodity are gaining attention. While there are challenges to overcome, partnerships and advancements in recycling technologies are paving the way for a more sustainable and circular approach to battery production and disposal.

Hot Take: The Impact of Battery Recycling and "Black Mass" on New Businesses

The rise of battery recycling and the emergence of "black mass" are reshaping the landscape of the global electric vehicle (EV) industry. This shift presents both opportunities and challenges for new businesses. As automakers and Western governments strive to build supply chains independent of China, battery recycling is becoming a critical component of the EV ecosystem. The term "black mass," referring to the mixture of metals obtained from recycling EV batteries, is now a commodity in its own right. This emerging market offers new businesses the chance to carve out a niche in a growing industry. However, the path to success is not without obstacles. The production of black mass involves complex processes and technical challenges, particularly with batteries using lithium-iron-phosphate chemistry. Furthermore, regulatory issues pose significant hurdles, especially in Europe where black mass is classified as hazardous. This classification brings about concerns regarding packaging, transportation, and trading of the material. Despite these challenges, the growth of the EV industry and the increasing focus on sustainability are driving the demand for battery recycling and the production of black mass. New businesses that can navigate these challenges and seize the opportunities may find themselves at the forefront of a sustainable and circular approach to battery production and disposal.
Story First Published at: https://financialpost.com/pmn/business-pmn/hyperdrive-why-the-ev-industry-is-talking-about-black-mass
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