RecycLiCo JV for Taiwan recycling plant

Joining hands toward the stable supply of critical battery materials, RecycLiCo Battery Materials Inc. announced it has entered into a 50-50 joint venture with Zenith Chemical Corp. to build a 2,000 metric ton per year lithium-ion battery recycling plant in Taiwan.

Since 2016, RecycLiCo has facilitated up to 100% extraction of valuable battery materials from nickel-manganese-cobalt and now lithium-iron-phosphate cathode chemistries.

As all these battery chemistries contain lithium, which has seen a more than 350% increase in price year-over-year due to the ongoing clean energy transition, attention to offsetting the costs and resources for electric vehicles and clean energy generation has possibly become the great race of the 21st century.

After signing a memorandum of understanding in February 2022, RecycLiCo and Zenith successfully collaborated with a third-party battery materials company to validate the RecycLiCo process and to confirm the quality of its high-nickel cathode precursors.

The initial plant, estimated to cost roughly US$25 million, will be dedicated to processing and converting lithium-ion battery waste into valuable resources such as battery precursor cathode active material, lithium hydroxide monohydrate, and lithium carbonate.

Agreeing to build their first commercial-scale battery recycling facility and contribute 50% of the required capital in three initial stages, with the balance being advanced as required to fund the construction and startup costs, Zenith's contribution will be provided through capital – with RecycLiCo receiving a 10% interest in the JV in return for a license of its technology, and the remaining balance to be provided with the company's own funding.

"By leveraging our collective strengths and expertise, we are confident in our ability to make a significant impact in the battery recycling industry, supporting the circular economy, and demonstrating the efficiency of our process on a commercial scale," said RecycLiCo CEO Zarko Meseldzija. "This partnership signifies a crucial step forward in our business plan and represents an exciting opportunity for the battery recycling landscape."

Specializing in the production of nickel-based chemicals, including high-purity nickel sulfate for lithium-ion batteries, Zenith has achieved recognition and qualification from major cathode producers worldwide.

"I am pleased to announce our joint venture and look forward to working closely with RecycLiCo to establish the first commercial recycling plant in the world, based on RecycLiCo'S proprietary technology," said Zenith Chemicals Chairman James Fang.

As an incentive to enter the JV, RecycLiCo will receive a royalty on net product sales, whilst Zenith will receive roughly 4 million RecycLiCo shares and 6 million share purchase warrants. Under a five-year term, the warrants will have an exercise price based on the weighted average trading price for the 30-day period preceding the agreement.

"Zenith is an ideal partner for our first joint venture on several levels. They have deep technical expertise in chemical processing, and established infrastructure, which will enable us to move swiftly and efficiently toward production," said RecycLiCo Chairman Paul Hildebrand. "Zenith has extensive contacts in the lithium-ion battery field, and as a private company, they possess a dynamic and flexible management team capable of reacting quickly to emerging opportunities. I extend my gratitude to the management teams from both Zenith and RecycLiCo for their commitment and dedication in bringing this agreement to fruition."

In building the first commercial battery recycling plant, based on RecycLiCo's technology, the joint venture combines the extensive expertise, resources, and novel technology of both RecycLiCo and Zenith.

The JV facility will leverage RecycLiCo's lithium-ion battery recycling process and Zenith's existing land, infrastructure, and labor resources in Taiwan.