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Nth Cycle co-founder and chief executive officer Megan O’Connor spoke to Fastmarkets on Wednesday, September 11 about the opening, the company’s future plans and thoughts on the current critical materials supply chain in the US and Europe.
“We like to say we didn’t build a refinery, we didn’t even build that building – we installed our electro-extraction technology, which we call the Oyster… to refine a variety of nickel-bearing feedstocks, batteries or black mass being one of them, from our partner recycling facilities,” O’Connor told Fastmarkets.
The company was able to install and operationalize their Oyster system at an existing 20,000-square-foot facility that will process black mass and other nickel scrap, as well as serve as a test site for partners. The Fairfield, Ohio, facility can process up to 3,100 tonnes per year of scrap materials to produce up to 900 tpy of MHP, according to a September 10 Nth Cycle press release.
The installed Oyster system converts recyclable industrial waste and mined ore into the full spectrum of critical metals and reduces greenhouse gas emissions by more than 90%, the press release said. According to O’Connor, the Nth Cycle process has a yield of over 90%, on a metals basis.
“We’re really excited to be that first step in the right direction toward getting a secure domestic supply of these critical minerals here in the US,” O’Connor said.
“Ohio is unique because we fully own and operate this facility. But our business model is to go onsite with partners. So, the next and all the deployments after this are really to deploy on site [with recycling partners,] at least in the near term,” she said.
These partnerships may include smaller, more regional recycling facilities, or larger automotive, original equipment manufacturer (OEM) or other industry partnerships.
The plan, O’Connor said, is to switch to tolling agreements with these partners for the use of Nth Cycle’s technology. Ohio will be the sole facility that Nth Cycle sells its own material out of.
The MHP produced at the Ohio facility will be sold on a combination of contracts, spot markets and in tandem with recycling partnerships, according to O’Connor.
“We’ve gotten nothing but positive feedback so far,” O’Connor said regarding the MHP produced at the facility.
“It’s sort of a product that nobody’s ever really seen before,” in terms of its quality, she said. “I think it falls in that [MHP] category, but it is a very premium product compared to what you see [available] overseas.”
In an interview with Fastmarkets, vice president, head of business development at Nth Cycle in 2023, Guillermo Espiga, said that the Oyster produces high-purity MHP with a combined nickel and cobalt content of 55-60% (dry basis); in contrast, Indonesian MHP typically has a combined nickel and cobalt content of 35-40% (dry basis).
O’Connor also spoke on the current markets for battery raw materials and the effects downstream, as weak underlying metals rates have pushed down payables for black mass across Asia, Europe and the US.
“I think our strategy from the very beginning when we founded Nth Cycle was… batteries, cobalt and nickel, [these] one or two supply chains we need to fix, but there’s a need for all critical minerals, right? They all have the same issues, the same story of, the vast majority of our supply comes from overseas and refining tends to be the biggest problem with onshoring all of those,” O’Connor said. “We started with cobalt and nickel, [but] the beauty of our technology is that we can process more than just one feedstock. So, we’re not pitting ourselves to just the battery industry and we also produce a product that can go into any nickel end use [market.]”
“We knew we would face a down cycle [of metals prices] at some point in building this company, and so it just happens to be now. But we developed a strategy to be able to operate. And that’s another issue we’re trying to solve in this space,” she said. “We wanted to build a system that could operate through these low times, because that’s where we feel the biggest impact could be made.”
We really want to be that swing capacity… we can operate at higher volumes when our partners want us to, and we can scale back when our partners want us to. But there is, at least as of today, no operational environment which we can’t operate in.
“That’s part of the modularity and why we chose to build a modular system that could scale and turn on quickly when metals prices are high but still operate when prices are low, instead of building out one centralized facility that has to operate at a certain… high volume in order to be profitable and otherwise has to be completely shut down. Those are really the dynamics that we’re trying to solve here with the system that we’ve built,” O’Connor said.
In terms of plans to process more critical minerals in the future, O’Connor said that “getting to scale and deploying as many units as we can for this specific cobalt-nickel scrap refining application are really the near-term goals; and then in development right now, which we hope to have fully ready in about a year or two years, is… to work with copper scrap.”
Right now, the nickel-bearing scrap material can “also have copper. So, all these folks get a wide range of scrap materials, not typically just one or the other,” she said.
Also in the pipeline are rare earths, “so think about magnet recycling [as] sort of the third and furthest out on our development timeline.”
The nickel-cobalt refining also produces a lithium brine, and Nth Cycle is “working to develop a solution to produce a by-product” out of that as well, O’Connor said.
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When looking at the critical materials supply chain, “[one] of the biggest challenges the industry faces is just speed,” O’Connor said. “I think that’s one of the things we’re trying to combat and one of the reasons five [to] seven years ago we were developing the strategy of how we’re going to deploy… speed is everything.”
“We don’t need critical minerals 10… or five years from now, we need them yesterday,” O’Connor said, adding that part of the company’s aim is to “sort of show people that there’s this new model that will help us. While one of our deployments is not massive volumes, the goal is to get as many of these deployments out as we can, and getting them out in under 12 months is what we’ve been able to prove with Ohio.”
“We can rapidly deploy these in parallel to try and start to solve these really painful issues fairly quickly, even in this environment of low commodity prices,” she said.
Looking at the US supply chain for critical materials, O’Connor said, “I don’t think we’ll solve this issue if we don’t become modular.”
The large centralizing refining model works really well in Asia because they have the massive assets to support those multi-billion-dollar refineries. Europe doesn’t have those, the US doesn’t have those.
When looking at large-scale investments for refineries in the US, O’Connor said there is “risk on top of risk.”
But, she continued, “we think we are uniquely positioned to be that modular solution because of our technology. The technology enables the strategy and the business model. I do think we’ll start to see more… [companies] trying to figure out other modular solutions.”
When looking at the perception of the industry and supply chains, O’Connor said that “there’s a sentiment in the market that EVs or EV sales are slowing down. We’re seeing some of the big OEMS say that they’re not going to go fully electric by the dates that they were hoping, and so I think that has just caused folks to think that we don’t necessarily need the speed or the capacity that we do.”
“There’s still a massive opportunity and a massive need for this. That’s just one of many great industries that will help us get to a clean energy economy. And so what I don’t want folks to do is forget about the rest of the things that we have to do to get there. I think EVs are one small piece of that. We’re trying to just educate folks [that] this is bigger than batteries. I mean, batteries [are] a big piece of that, but it is only one piece,” she said.
“There’s a lot of investments happening and there’s a lot of refineries trying to be built, ”but they are not yet operational, O’Connor said, adding that given Nth Cycle’s position as being “one of the only ones operational,” they are “excited to be able to process the black mass… and really start to move this industry forward.”
“Instead of just shredding batteries we can actually process them back into something usable again,” she said.
Nth Cycle is also looking at investments and growth in Europe, whose market “is pulling us in very rapidly,” O’Connor told Fastmarkets.
“I think they have a very unique regulatory space [where] they really, really need this,” she said. “The US is on its way, the Inflation Reduction Act is one piece, I think, to get us to move as fast as we need to to really solve this issue from a climate change perspective. But I think Europe… is just faster and has done more to really force – whether you’re talking about the manufacturers or whoever in the supply chain – to recycle, and refining is a piece of that.”
“We’re being pulled very quickly into Europe because they really don’t have anything else to do with their scrap at the moment,” she added.
Most of the black mass produced in Europe is currently designated as hazardous waste material, which means that it cannot be shipped to nations outside of the Organization for Economic Co-operation and Developed (OECD), and trading inside the OECD is only possible when going through a notification procedure under Basel Convention rules.
When looking at difficulties in transporting black mass material in Europe, O’Connor said that a “unique benefit of our system is that we… can go right on site… we don’t necessarily have to worry about that transportation across borders.”
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