ABTC expects nearshoring of lithium hydroxide production to help US cathode makers

Most cathode plants being built in the US and Canada at the moment will produce high-nickel cathode, which requires lithium hydroxide as a raw material, chief executive officer Ryan Melsert said during an interview last week at Fastmarkets’ 16th Lithium Supply and Battery Raw Materials Conference 2024, in Las Vegas.

There is virtually no lithium hydroxide produced in the US today, however, and the product has a short shelf life of around half-a-year, he said.

“If you have a cathode plant in the US or Canada, and you have to ship hydroxide from inland China, you can eat up two or three months of shelf life before it even gets to your factory, and then you’ll have two to three months left until it expires, essentially,” Melsert said.

“Companies are very interested in sourcing domestically because we can get it to their plant within a few days,” he said, “and then they get much more time to use it in their facility.”

The battery materials company, based in Reno in the US state of Nevada, announced last month that it had successfully manufactured demonstration-scale quantities of lithium hydroxide at its facility in Tonopah, also in Nevada, using processing technologies to produce lithium products from claystone.

ABTC can now accelerate construction of its commercial-scale lithium refinery at Tonopah, which is expected to produce 30,000 tonnes per year of lithium hydroxide at full capacity, with production scheduled to begin “early next year,” according to Melsert.

ABTC also operates a recycling plant at the Tahoe Reno Industrial Center in Nevada, which will have capacity to process an initial production scale of 20,000 tpy of battery feedstock material.

The company has partnered with German battery materials producer BASF and California-based Nanotech Energy, a maker of graphene-based energy products, to “close the loop” for lithium-ion battery production in North America.

“At both plants, we make the same products and sell to the same customers, so we see a lot of synergy in doing both within one company,” Melsert said. “When we sell to big automotive [original equipment manufacturers], they like the recycling side because of the sustainability and the ability to buy back the product, but they love the scale of the primary lithium.”

ABTC’s lithium hydroxide plant is expected to produce more lithium than every other recycling plant in the US combined, Melsert said.

Following ABTC’s announcement that it has successfully manufactured lithium hydroxide from claystone, US Department of Energy Secretary Jennifer Granholm visited both of ABTC’s facilities.

“The goal was to talk through the business plan – why this is needed and why this makes sense,” Melsert said of the visit. “Making lithium from clay is first-of-kind, so it’s higher risk than normal, which is why the government stepped in, and we have to de-risk it before private industry steps in.”

Claystone, according to Melsert, is an unconventional resource of lithium, similar to geothermal brine or oilfield brine, versus the two conventional resources – hard rock and brine. The company has received six rounds of funding from the DoE in recent years thanks to its novel approaches at both facilities. The company most recently received more $60 million in tax credits through the Qualifying Advanced Energy Project Credits (48C) program.

Most of ABTC’s lithium hydroxide production will be sold to cathode refiners via long-term agreements that include commodity price corrections, but the company also will reserve a portion to be sold on the spot market, Melsert said.

Regarding the company’s bet on lithium hydroxide and the implications of that on demand for lithium iron phosphate (LFP) versus nickel-manganese-cobalt (NMC) batteries, Melsert said: “I don’t see either one completely winning out. There are different types of consumers that want different types of products.”

Fastmarkets lithium price updates

Fastmarkets’ latest weekly price assessment for lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price, ddp US and Canada, was steady at $13.80-15.00 per kg on June 27. The corresponding assessment for lithium hydroxide monohydrate, LiOH.H2O, 56.5% LiOH min, battery grade, spot price, ddp US and Canada, fell by 2.78% to $13.50-14.50 per kg on the same day.

Spot lithium prices in China’s domestic market have been weak on sluggish downstream demand from the battery sector and bearish sentiment, although battery-grade lithium prices were steady on a CIF China, Japan and Korea (CJK) basis.

Fastmarkets has proposed launching weekly price assessments for black mass payable indicators, ex-works US, to provide insight into the US battery recycling sector.

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