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Glencore secures long-term supply of recycled minerals

© ShutterstockGlencore headquarters in Switzerland.
Glencore headquarters in Switzerland.

Mining giant Glencore (LON:GLEN) has signed a 15-year agreement with ACE Green Recycling for the supply of critical minerals that will be recycled from spent batteries.

  • ACE Green Recycling (ACE) will recycle lead-acid and lithium-ion batteries to supply Glencore with transition metals and critical minerals including lead, lithium, nickel and cobalt.
  • The agreement will promote circularity within the critical minerals supply chain, reducing their environmental impact while lowering the demand for virgin ore.
  • The partnership highlights the role that recycling must play in scaling the supply of critical minerals that are vital to the global energy transition.

ACE Green Recycling develops end-of-life solutions for spent batteries. Its 15-year agreement with Glencore will involve setting up four battery recycling facilities by 2024 for a cumulative capacity of around 1.6 million tons of metals like lead and critical minerals such as cobalt, nickel and lithium. ACE plans to minimise the environmental impact of its plants by using proprietary technologies that limit emissions and provide high recovery rates of materials.

The new facilities will be located in the US, India and Thailand, and will be used to recycle lead-acid and lithium-ion batteries. Under the new agreement, Glencore will be able to purchase up to 100% of their output.

From its headquarters in Singapore, ACE also intends to partner with stakeholders throughout the battery ecosystem to enhance circular economy practices and keep critical materials within the countries that generate the battery waste.

Critical minerals necessary for green transition are in short supply 

Achieving a clean energy transition on the route to achieving global net zero by 2050 will require a significant increase in the production of batteries. According to the International Energy Agency (IEA), meeting global demand for applications like electric vehicles (EVs) or renewable energy storage will require an increase in critical minerals supplies of around six times their current level by 2040.  

Of these minerals, lithium is expected to be the most in demand, with supplies needing to increase by up to 40 times today’s volume. Supplies of graphite, nickel and cobalt, meanwhile, must be scaled by around 20-25 times.  

The Faraday Institution, a UK-based research organisation, has created a model of supply and demand of raw materials needed for battery production by 2040. It sees the rising production of EVs, changes in battery chemistry, and requisite material intensity of each of these chemistries as being the key determinants of mineral demand.  

According to Faraday’s analysis, the long lead times in developing natural supply sources could create supply bottlenecks, which could prevent critical interim transition targets from being achieved and challenge global ambitions to meet net zero by 2050. 

Countries are forming agreements to secure critical mineral supplies 

Several countries have signed multilateral and bilateral agreements to secure their supply of critical minerals. In June 2022, the US announced the establishment of the Minerals Security Partnership (MSP), which will see it working alongside Australia, Canada, Finland, France, Germany, Japan, South Korea, Sweden, the UK and the EU to build a minerals supply chain that will support “economic prosperity and climate objectives”. 

In October 2022, Australia and Japan signed a similar agreement to build a supply chain for critical minerals. Their deal will give Japan access to some of the world’s largest reserves of lithium and cobalt in Australia, according to the US Geological Survey.  

Mining alone will not satisfy the forecast demand 

The IEA has echoed the findings of the Faraday Institution, citing a lack of critical minerals as being a major risk to battery supply chains. In addition, it warns that investment towards expanding these supplies could fall short of the levels necessary to realise the green energy transition.  

Each of these risks can be viewed from a medium- and long-term perspective. In the mid-term, supply availability will be constrained by insufficient investment, as it currently takes an average of around 16 years for mining projects to go from discovery to production. In the long term, declining ore quality will is likely to become a bigger constraint on supplies.  

Securing supplies of critical minerals and rare earth elements (REEs) has therefore become a strategic imperative for many countries. According to the IEA, however, efforts to scale-up investments must be accompanied by a wider strategy that includes recycling, supply chain resilience and technological innovation. 

Recycling can supply up to 10% of critical mineral supply 

The IEA suggests that recycling could significantly relieve the pressure on the critical mineral primary supply chain, but recycling practices for many lithium and rare earth elements are not as well established as those for base metals. Indeed, ACE’s own projections suggest that the amount of recycled materials available from Lithium-ion batteries will only be about 20% of that from lead-acid alternatives. 

As batteries used in early EVs and energy storage systems begin to reach the end of their lifecycle, the amount of recyclable materials is set to increase. There is some hope that this will begin is to occur more frequently by 2030, converging with the expected acceleration of demand for critical minerals.  

While these increased quantities would not eliminate the need for new investment in primary material supply, the IEA estimates that recycled minerals could reduce primary supply requirements by around 10%. 

Given that the largest source of recycled minerals will come from end-of-life, regions that have deployed such products more widely could potentially reap the rewards of having access to greater economies of scale. 

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