Seeking Alpha
Long-term horizon, nano-cap, micro-cap, alternative energy
Profile| Send Message|
( followers)  

One of the most pervasive and enduring myths in the energy storage sector is that a robust recycling infrastructure for used lithium-ion batteries will be built before the wonder-batteries that are being manufactured today for the first generation of plug-in vehicles reach the end of their useful lives. In the worst case scenario, advocates suggest used lithium-ion batteries will be stockpiled until there are enough used batteries to justify the build-out of recycling infrastructure.

The numbers tell a very different story.

For several years the single minded obsession of all lithium-ion battery developers has been reducing costs to a point where using batteries as a substitute for a fuel tank makes economic sense. Most of the progress has come from substituting cheap raw materials like iron, manganese and titanium for the more costly cobalt and nickel that were used in first generation lithium-ion batteries. Unfortunately, when you slash the cost of the materials that go into a battery you also slash the value of the materials that can be recovered from that battery at the end of its useful life.

Using Material Data Safety Sheets from Powerizer and current LME Prices from MetalPrices.com, I've calculated the value of the metals that can be recovered from recycling a ton of used batteries and summarized them in the following table.

Battery Chemistry Metal Value

Per Ton

Lithium cobalt oxide $25,000
Lead acid $1,400
Lithium iron phosphate $400
Lithium manganese $300

Given the extremely high metal value of used cobalt-based lithium batteries it seems strange that only one company in the world, Unicore of Belgium, has bothered to develop a recycling process. When you take the time to read and digest Umicore's process description, however, the reason becomes obvious. Recycling lithium-ion batteries is an incredibly complex and expensive undertaking that includes:

  • Collection and reception of batteries;
  • Burning of flammable electrolytes;
  • Neutralization of hazardous internal chemistry;
  • Smelting of metallic components;
  • Refining & purification of recovered high value metals; and
  • Disposal of non-recoverable waste metals like lithium and aluminum.

The process is economic when a ton of batteries contains up to 600 pounds of recoverable cobalt that's worth $40 a pound. The instant you take the cobalt out of the equation, the process becomes hopelessly uneconomic. Products that cannot be economically recycled can only end up in one place, your friendly neighborhood landfill.

Lead-acid batteries are the most widely recycled product in the world because they're 70% lead by weight, the recycling process is simple and a robust global recycling infrastructure already exists. Many leading lead-acid battery manufacturers including Johnson Controls (NYSE:JCI) and Exide Technologies (XIDE) view their recycling operations as major profit centers that also insure continuity of raw materials supply.

Despite their extremely high metal value, cobalt-based lithium batteries are rarely recycled because process is so difficult and expensive.

In light of their appallingly low metal values, lithium iron phosphate batteries from A123 Systems (AONE) and Valence Technologies (VLNC), lithium manganese batteries from Ener1 (NASDAQ:HEV) and lithium titanate batteries from Altair Nanotechnologies (NASDAQ:ALTI) will never be reasonable candidates for recycling, which effectively guarantees that buyers will ultimately be required to pay huge up-front disposal fees – think tires with a few more zeros.

In the final analysis, the recycling mythology is just another glaring example of unconscionable waste and pollution masquerading as conservation.

Disclosure: None

Source: Why Advanced Lithium Ion Batteries Won't Be Recycled