The US and Europe have a nickel problem. The vital mineral is used in everything from batteries and missiles to electronics and steel. Nonetheless, both regions face challenges with mining and refining, mainly due to permitting issues and waste issues.
Indonesia and China dominate the refining process. But look a little closer and it’s clear that Chinese companies control about 75% of Indonesia’s nickel refining capacity, and Indonesia controls more than half of the world’s supply.
As relations with China deteriorate, “a lot of companies are starting to really look at how they can start making improvements here in the United States.” Megan O’Connor, co-founder and CEO of Nth Cycle, told TechCrunch.
O’Connor’s startup has been developing electrochemical systems to purify nickel and other important minerals, including cobalt, copper and rare earths. About a year ago, the company began production at a facility in Ohio that can handle up to 3,100 metric tons of scrap metal. Now Nth Cycle has quadrupled that amount by signing a $1.1 billion deal with commodities trader Trafigura.
The new deal represents a shift in how companies evaluate their metals supply chains and how technology can transform them.
Today, not only metal smelting but also recycling takes place abroad. When the battery reaches the end of its life, it is shipped elsewhere for processing. “These are really valuable resources that we’re currently shipping primarily to China. We don’t necessarily want to have to give up those valuable resources and have to buy them again,” O’Connor said.
O’Connor was not alone in realizing this. Another company, Westwin Elements, operates a small refinery in Oklahoma and is attempting to expand into a new facility in Georgia, although it has faced opposition there.
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Nth Cycle believes the solution is a modular electrical system. “You can’t translate the traditional, centralized refining methods that actually work well overseas, across Asia,” O’Connor said. “Translated from here, it’s too capital intensive.”
The startup works with recyclers to obtain black chunks of mixed metal from shredded batteries and other sources of nickel, such as catalysts from the oil and gas industry. This is then fed into an electrochemical system that is about 5 to 10 times smaller than a conventional refinery. Nth Cycle says because the system is smaller, it can make money faster by reducing capital expenditures.
“Our system can operate profitably at around 6,000 metric tons per year,” O’Connor said.
Those low numbers are important. There will eventually be a wave of EV batteries that will require recycling and metals that will need to be refined, but that hasn’t happened yet and likely won’t happen until the end of the decade. Redwood Materials, one of the major players in battery recycling, started a separate division to reuse old batteries instead of recycling them after the team discovered that the cells had much more life left in them.
O’Connor is now confident there is enough raw material to supply the two new facilities the company is building in the United States and Europe. The facilities in South Carolina and the Netherlands can process a total of 18,000 metric tons of scrap. Nth Cycle says the process can be adjusted as material composition changes.
O’Connor said other approaches were vulnerable as waste volumes increased because they relied heavily on economies of scale to compete with Asian processors. She said Nth Cycle can add modules as battery waste increases.
“This is how we transform refining capacity here (in the U.S.) and actually get refining capacity in line with production,” she said.
