India’s huge EV battery gigafactory plans could spur black mass imports and cut exports, said Lohum founder

India’s burgeoning electric vehicle (EV) battery-making industry could mean the country becomes a significant importer and a reduced exporter of black mass in the coming years, Rajat Verma, founder and chief executive officer of Indian battery recycler Lohum, told Fastmarkets in an interview

Black mass — the term used to describe shredded and sorted lithium-ion battery packs — is already being produced in India, but much of the tonnage generated is being exported, with only limited volumes imported. This is all set to change in the coming years, according to Verma.

“We aspire to be at a stage where all of the black mass in India is being processed within India, and India is providing a meaningful alternative to Southeast Asia, China and Korea for black mass coming from the western world,” Verma said.

Any cut in India’s ability to export black mass, as well as a rise in import demand, could have dramatic consequences for black mass supply/demand dynamics globally.

Currently, India’s position as a net exporter has allowed consumers in Asian nations such as South Korea to regularly purchase Indian black mass as an alternative to material from the United States and Europe.

Recent deals for Indian material were heard at payables of 70% CIF Korea for nickel cobalt manganese (NCM) black mass for nickel and cobalt, including the value of lithium, and at 62.5% CIF for lithium cobalt oxide (LCO) black mass for cobalt, including the value of lithium.

Fastmarkets’ assessments of the black mass, NCM/NCA, payable indicator, nickel, cif South Korea, % payable LME nickel cash official price and black mass, NCM/NCA, payable indicator, cobalt, cif South Korea, % payable Fastmarkets’ standard-grade cobalt price (low-end) were both at 65-70% on Wednesday February 7, unchanged week on week. 

Lohum leading in recycling

Lohum has the largest market share among India’s growing battery recycling and black mass-producing market, according to Verma, and not only does the company produce black mass, but it also recovers critical recycled metal salts from the powder.

“Today, we are the largest battery recycler in India, and we have approximately a 20,000-tonne capacity to recycle materials all the way to refining the materials and producing a final product in the form of nickel salts, cobalt salts and lithium salt,” Verma said.

The company has an input capacity of 20,000 tonnes of battery scrap with the ability to produce 10,000 tonnes black mass per year.

“Of that black mass, we subject 60-65% of that material to internal processing,” he said.

“India is probably producing collectively 400-500 tonnes of black mass per month. We probably have a 70% share of the market. On a regular basis, there were three to four producers of black mass, and on an irregular basis, around seven to eight,” Verma said.

India’s existing stock of scrap lithium-ion batteries are largely made up of LCO consumer-electronic batteries, producing a high-cobalt LCO black mass, Verma said.

EV market explosion in India

Lohum’s existing apparatus to produce recycled battery raw materials positions the company very well, given India’s enormous plans to increase its production of lithium-ion batteries and the fact that India lacks natural resources to produce a large volume of primary battery raw materials.

“[Some] 200 gigawatt hours [GWH] of battery manufacturing is being commissioned in India from 2024 to 2030. Each year, from 2024, 20% of this will be commissioned,” Verma said. “There will be around 10% of scrap generated from these factories per year, meaning ultimately 20GWH per year of scrap”.

The rough breakdown of India’s future battery production will be 70% lithium-ion phosphate (LFP) and 30% NCM chemistries, he said.

Industry association India Energy Storage Alliance (IESA) said in October that the country is targeting to have more than 500 GWH in lithium-ion battery capacity by 2035.

After years of policymaking, India could finally have a number of gigafactories enter their first phases of commercial operations in 2024.

The wave will be headed up by Ola Electric Mobility’s 20-GWH NCM-cell gigafactory, which is expected to begin operations from the first quarter of 2024, alongside LFP production plants by Rajesh Exports and Reliance New Energy.

Expansion in black mass

Partnerships have been key to the growth of the global lithium-ion battery recycling industry, with the recent deal between Singapore-headquartered recyclers GLC Recycle and Chinese battery material supplier CNGR a strong example.

Lohum sees the value in such partnerships, too, with Verma suggesting that the company can help recyclers in regions such as Europe boost their ability to extract lithium from black mass.

“We do believe Lohum has one of the best lithium yields in the market. From what we’ve seen, China tends to be 70% plus; Korea seems to be 55-70%; and the rest of the world is operating at less than 50%. This is what is happening at an industrial scale,” Verma said.

The new EU Battery Regulation, adopted in June 2023, stipulates that — by no later than December 31, 2031 — all EU recycling processes must achieve a material recovery rate of at least 80% for lithium and 95% for nickel and cobalt.

One way for black mass consumers to achieve these results more quickly is by partnering with firms like Lohum that have experience in achieving strong yields, according to Verma.

“Moving from 40% to 85% on lithium yield took us about five years. In Europe, I doubt anyone can get above 40%, but obviously they can partner with a Chinese company or a company like ours and get higher. It is a tough nut to crack,” Verma said.

As a result of low lithium-extraction capabilities and a lack of operational commercial black mass consumption capacity, no EU black mass consumers pay for the value of lithium in black mass on a consistent basis. This is unlike in markets such as China, South Korea and Southeast Asia, where the value of lithium is either rolled into payables for nickel and cobalt or paid for with a lithium payable, with the latter particularly the case in China.

The huge commercial opportunities in the space mean that “in the next two to three years in India, we will be able to see many recyclers who are able to offer battery-grade materials to the cell-manufacturer companies themselves,” Aln Rao, CEO of India’s Exigo Recycling, said at the Material Recycling Association of India (MRAI) international conference in Kochi, in February 2023.

Lohum has also expanded into other geographies in recent years, setting up offices and partnerships in several jurisdictions.

“We already have got arrangements in multiple parts of the world, where we will be looking to put up both shredding and refining capacity. We’ve already incorporated what we called Lohum America, Lohum Europe and Lohum Middle East,” he said.

“We certainly see ourselves doing more than just office work in these locations,” Verma added.

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