Nevada-based Aqua Metals (NASDAQ: AQMS) has announced a vital move toward launching its inaugural commercial-scale lithium battery recycling operation. According to a recent press release, the company has signed a non-binding term sheet with one of the world's largest privately held companies for a $33 million credit facility. This funding is pivotal for completing phase one of the company's Sierra AquaRefining Campus (ARC).
The announcement follows Aqua Metals' successful equity raise of approximately $8 million, which enhances its balance sheet and meets a crucial pre-condition set by the lender. This loan agreement comes after an exhaustive two-month review by the lender, scrutinizing the company's financial health, revenue potential, and various supply and offtake agreements.
An independent engineering report and lifecycle analysis conducted by ICF International further validates Aqua Metals' technology, highlighting significant reductions in waste and greenhouse gas emissions. This technology represents a first-of-its-kind approach to lithium battery recycling.
While the loan agreement is non-binding and subject to final negotiations and due diligence, the lender—who remains anonymous—has shown a strong interest in investing in global decarbonization technologies.
Phase one of the Sierra ARC involves transforming a 20,000-square-foot building into a state-of-the-art lithium battery recycling plant capable of processing 3,000 tons of feedstock material annually. This material is sourced from spent lithium-ion batteries and manufacturing scrap, and the facility's output will include lithium carbonate, nickel, cobalt, and other critical metals. These outputs are equivalent to approximately 30,000 average-sized electric vehicle (EV) battery packs.
Post-phase one, Aqua Metals aims to scale the facility's production to over 10,000 tonnes per year. This growth is expected to establish a circular supply chain for critical minerals essential to the burgeoning battery manufacturing industry in the United States.
The Sierra ARC will not only be Aqua Metals' first commercial-scale facility but also North America's first sustainable lithium battery recycling operation. The plant is slated to begin production this year.
This funding will enable Aqua Metals to enhance its operational capacity and further develop its proprietary AquaRefining™ technology. Unlike traditional recycling methods, AquaRefining™ uses electricity to extract valuable metals from spent lithium and EV batteries, significantly reducing CO2 emissions and chemical waste pollution. This eco-friendly approach is a substantial step toward combating climate change and preserving ecosystems.
"This agreement marks a significant milestone in securing the financial resources necessary to complete the Sierra ARC, which is pivotal to our strategy of establishing a closed-loop supply chain for battery recycling," said Aqua Metals CEO Steve Cotton. "This partnership will not only support our financial stability but also will reinforce our commitment to innovation and sustainability in the lithium battery recycling sector."
The investment's broader implications suggest a major advancement in sustainable technology and a substantial contribution to the global efforts in reducing waste and emissions. As the demand for electric vehicles and renewable energy storage solutions grows, the need for efficient and environmentally friendly recycling methods becomes increasingly critical.
