The massive popularity of electric vehicles has boosted the demand for batteries, and also increased the demand for battery recycling. A large number of discarded batteries need to be recycled and treated, and there is plenty of development opportunities for the recycling segment.
LG New Energy, one of the world’s largest producers of EV batteries, has entered into a partnership agreement with Li-Cycle, a lithium battery recycling company. LG Chem and its battery subsidiary LG New Energy have agreed to purchase 20,000 tons of battery-grade nickel material from Li-Cycle in a 10-year supply agreement, with deliveries beginning in 2023. Nickel is an important raw material for the cathode of EV batteries, which not only helps batteries store more energy, but also helps manufacturers reduce the use of cobalt.
EV manufacturers, mining companies and chemical suppliers are competing to control the supply of more raw materials, including through recycling, which is the key to the global transition to low-carbon energy. These companies also see an opportunity to help curb soaring commodity prices, which could lead to battery costs rising for the first time since 2010.
Li-Cycle, which received strategic investment from LG New Energy and LG Chem, has not been established for a long time, having only been founded in 2016, and is a manufacturer that specializes in recovering key lithium-ion battery raw materials such as nickel and cobalt from discarded batteries. The strategic investment by LG Chem and LG New Energy and the business cooperation agreement will certainly accelerate the development of Li-Cycle.