How a Hong Kong startup is going about recycling lithium batteries
A Hong Kong lithium battery recycling start-up is eyeing opportunities at home and in Southeast Asia amid overcapacity and intense competition for recyclable materials in mainland China.
Hong Kong Science and Technology Park-based Achelous Pure Metals currently has a capacity to process 150 tonnes of used non-electric vehicle (EV) batteries a year. It has set up its operations in an industrial building in Tuen Mun in the New Territories, which is pending approval from the Environmental Protection Department.
The company crushes the batteries into a so-called black mass – a powdery mixture of valuable metals like lithium, cobalt, copper, manganese and nickel – which is then refined into lithium carbonate, cobalt and nickel compounds.
'Our goal is to tackle the growing problem of discarded lithium-ion batteries by bringing scalable, movable, eco-friendly recycling to urban centres starting in Hong Kong, with plans to expand to [Southeast] Asia,' said Alan Wong Yuk-chun, the co-founder and technical director.
He said that as the city lacked recycling facilities, small-scale recycling of non-EV batteries could be done in Hong Kong and showcased for overseas business development. Most spent EV batteries were collected and exported, he added.
Between two and three tonnes of lithium batteries a day were collected from discarded electrical appliances and power banks in Hong Kong, he said.
Achelous has built a pilot version of a robot-assisted system to sort, shred and sift materials derived from the batteries. The system, which is pending a patent, uses a combination of vacuum and heat treatment to evaporate and capture harmful materials and gases like epoxy adhesives and fluorine.
The five-year-old start-up has built another pilot project that combines nanoparticles suspended in water or organic solvents that separates molecules based on their charge, to extract and refine valuable metals from the black mass.
While Achelous has already deployed its technology at a client's recycling plant in east China's Jiangsu province, which is capable of processing 10,000 tonnes a year, it faces challenges in growing its business due to rampant growth in recycling capacity on the mainland in recent years.
'Our client's factory has to compete for black mass at higher and higher prices, while the prices of end-products like lithium carbonate keep falling amid oversupply,' said Shawn Cheng, Achelous' co-founder and research and development director.
The price of battery-grade lithium carbonate, sometimes referred to as 'white gold', plunged nearly 90% to 60,600 yuan (US$7,725) a tonne in May, from 568,000 yuan in November 2022, according to Daiwa Capital Markets.
Amid recycling overcapacity in China and US-China trade tensions that threaten to slow demand for lithium batteries, lithium oversupply may peak globally in 2027 before seeing a deficit in the early 2030s, according to a forecast by UK-based commodities consultancy Wood Mackenzie last month.
Instead of swimming against the tide, Achelous changed its strategy, setting up a production line in Hong Kong while also seeking to help companies in Southeast Asia build 'micro-factories' to break down lithium batteries and produce black mass to export to its clients in China.
The company is in talks with prospective partners to recycle spent lithium batteries from handheld transceivers used by the security industry in Hong Kong, and from discarded electronics in Malaysia and Singapore.
'We want to help [our] partners meet their future recycled content obligations and set up a system to keep track of the materials' footprint for compliance,' Cheng said.
Globally, demand for recycled battery materials has been mostly driven by regulations implemented in 2023 by the European Union.
The battery and recycling industry is working towards a 50% target for lithium recovery by 2027, rising to 80% by 2031. For cobalt, copper, lead and nickel, the target is 90% by 2027 and 95% by 2031. – South China Morning Post
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