- Mercedes will pay a JV 50 per cent owned by Neometals (ASX:NMT) more than $30 million for battery recycling assets
- The JV called Primobius sees Neometals team up with German manufacturer SMS
- Mercedes has ordered a second downstream component from Primobius for its own lithium battery recycling plant in Germany
- The EU is prioritising lithium battery recycling as a way to mitigate the impacts of being reliant on international supply chains for critical minerals
- Shares last traded at 20 cents
Neometals (ASX:NMT) shares were up nearly 15 per cent to 20 cents per share in late lunchtime trades today as the battery recycling player revealed news of a new deal with Mercedes-Benz.
Mercedes, for its part, is purchasing a battery recycling refinery asset from a JV in which Neometals owns 50 per cent.
The other 50 per cent is held by German engineering manufacturer SMS. Mercedes will hand over $31 million to the JV as part of today’s deal.
That JV is called Primobius, and it’s going to sell Mercedes the ‘hydrometallurgical refinery’ the latter needs for its own lithium-ion battery recycling facility in Kuppenheim.
Without Primobius, Mercedes can’t finish its project – so today’s purchase order (PO) is, in effect, binding – bar any unexpected change in desire from Mercedes.
Existing relationship
What market-watchers just stumbling onto Neometals now should note is that the company already boasts a relationship with Mercedes.
The luxury carmaker has previously ordered a shredding spoke from the company that basically tears lithium batteries apart.
Today’s PO sees Neometals installing the hydrometallurgical asset, or “hub”, as the next downstream component for Mercedes’s pilot plant.
EU enthusiasm
Battery recycling is one of the most readily achievable ways nation-states can ‘decarbonise’ their lithium battery supply chains.
While converting large mines into net zero emitters can be more than a fierce headache, the ability to harvest spent batteries for the critical materials within them is, given promising economics, perhaps a more achievable goal.
The European Commission introduced new laws to this end halfway through 2023.
“Supply certainty, low operating costs and low carbon footprint are key value drivers for OEM’s looking forward. Our measured approach to delivering scalable solutions with our partner and leading plant builder SMS augurs well for penetrating this enormous addressable market,” Neometals Managing Director Chris Reed said.
“The relationship exemplifies some of the unique aspects of Primobius’ business model. One of these is the ability to supply plant and offer technology licences.”
NMT shares last traded at 20 cents.