Leading the Way in Sustainable Lithium-Ion Battery Recycling, Helping Reduce the Carbon Footprint of EVs



KEY POINTS
  • Aqua Metals, Inc. (Nasdaq: AQMS), the Reno, NV-based company, began life as a battery recycling company in 2014 and has since morphed into an asset-light, IP-driven supplier and licensor of recycling technology.
  • Aqua Metals is revolutionizing metal recycling with its proprietary, non-polluting AquaRefining technology. The company is focused on sustainable metal recycling of materials strategic to energy storage applications, including lead and lithium.
  • AquaRefining currently produces lead with a purity of 99.996+%, and Aqua Metals seeks to extend this technology to lithium recycling through its strategic relationship with LiNiCo, a cleantech lithium-ion recycling company.
  • The lithium-ion battery recycling industry is on the ascend because of the rapid adoption of electric vehicles (EVs) worldwide.
  • Today, nine out of ten spent lithium-ion batteries end up in landfills. On the other hand, nearly all lead-acid batteries are recycled.
  • Aqua Metals will seek out commercial partnerships to develop a 'eco-network’ with producers and users of spent lithium-ion batteries who want to send those to clean recycling processors.
  • Aqua Metals intends to generate revenue by selling equipment and technology, as well as receiving royalty payments from the operators based on throughput of their facility.
  • Aqua Metals successfully tested V1.5 Aqualyzer, which can produce over 300% more lead above the original model, V1.0 Aqualyzer. This will be first deployed at the ACME facility.
  • Aqua Metals established an innovation center to apply the AquaRefiningTM process to lithium-ion battery (LIB) recycling R&D and prototype system activities. The nascent LIB recycling market is expected to exceed the lead battery recycling market by the mid-2020s.
  • As for the partnership with LINICO Corp. (LiNiCo), in Phase 1, LiNiCo will process LIBs into black mass, and Aqua Metals will process black mass at its innovation center to extract precious metals. Later in Phase 2, LiNiCo will pay license fees for using Aqua Metal's technology and equipment to extract the metal from black mass.
OUR INSIGHTS

The Opportunities

The markets for lead and lithium are growing rapidly, fueled by energy storage applications in automobiles, data centers, and renewables. Aqua Metals is well-positioned to take advantage of this growth through its proprietary AquaRefining technology. Prospective licensees will be looking for cost-effective and modular solutions that improve the purity of their recycled metals while also cutting emissions as they face higher regulatory burdens and strive to meet aggressive ESG and net-zero targets. Aqua Metals is poised to capitalize on this trend as its AquaRefining technology provides a fundamentally non-polluting and modular solution that scales recycling production to meet the growing demand for high-purity metals. Aqua Metals' addressable market is geographically boundless. It transitioned to become an enabler by using a capital-light business model that supplies clean and worker-safe technologies and equipment to metal recyclers.

The Obstacles

The company's novel AquaRefining technology, although proven on a commercial demonstration scale, has not yet been licensed to third-party commercial operations. It will be critical for Aqua Metals to secure revenue-generating equipment supply and licensing agreements and to successfully execute against those agreements by enabling its licensees to produce high-purity AquaRefined lead at scale.

• Aqua Metals, Inc. (Nasdaq: AQMS), the Reno, NV-based company, began life as a battery recycling company in 2014 and has since morphed into an asset-light, IP-driven supplier and licensor of recycling technology.
• Aqua Metals is revolutionizing metal recycling with its proprietary, non-polluting AquaRefining technology. The company is focused on sustainable metal recycling of materials strategic to energy storage applications, including lead and lithium.

EXECUTIVE DISCUSSION

Steve Cotton, CEO, has been a product person for over 30 years. He started by developing and commercializing voice and email messaging-related applications. He then built a company in the battery energy storage space for large global banks, data centers, and telecom operators. In late 2014, he shifted focus to battery recycling by joining and commercializing Aqua Metals.

Shawn Severson: Tell us about Aqua Metals. You have had an interesting history over the past few years, and an update will be great.

Steve Cotton: In 2014, we invented a technology called AquaRefining, a water-based application to recover metals very cleanly in an environment-friendly, low-emission, and very safe way. We then commercialized the technology, which we now call the Aqualyzer.

We proved the technology by making over 35,000 ingots of lead at our facility in the Tahoe-Reno Industrial Center. AquaRefining can revolutionize the ...

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