Glencore Plans to Build Europe’s Biggest Battery Recycling Plant

The two companies will study a plan to convert part of an old Glencore lead refinery in Sardinia into a plant recycling battery metals like lithium, nickel and cobalt, they said in a joint statement on Tuesday. The new facility — which could be commissioned by late 2026 or early 2027 — would have the capacity to process 50,000 to 70,000 tons a year of pre-treated scrap product known as black mass. That could make it the largest plant of its kind in Europe.

New regulations will oblige European car-makers to source growing volumes of recycled battery metals from 2030, creating a strong incentive for lithium-ion recyclers like Li—Cycle to build plants in the region. Yet with investments flooding into the sector, they’re also set to face a supply crunch as recycling capacity starts to exceed the volume of scrap available.

Shortages are likely to persist well into the next decade while the industry waits for early EV models to hit junk yards in big numbers, and by 2025 scrap supply may only satisfy a third of recycling capacity, according to industry consultancy Circular Energy Storage. In the meantime, recyclers will mainly be relying on scrap produced during the battery manufacturing process.

The Italian plant would be fed by a network of so-called spoke facilities that turn battery scrap into black mass, as well material sourced by Glencore. Canada-based Li-Cycle is set to bring its first recycling hub online in Rochester, New York, later this year, using a similar sourcing model.

Glencore — which bought $200 million of convertible Li-Cycle debt as part of a partnership deal last year — could offer a solution if the Canadian company runs into future shortages. That would involve supplementing waste supplies with raw materials from the commodity giant’s own mines until scrap volumes swell, Kunal Sinha, Glencore’s global head of recycling, told Bloomberg last year.

“If you’re building a standalone battery recycling business, that business is now under pressure,” Sinha said at the time. “Some of the recycling-only business models will not succeed, or at least will be very stressed, because they’re going to be waiting for all that scrap to arrive.”

Glencore and Li-Cycle plan to form a 50:50 joint venture to retool part of the existing lead refinery in Portovesme, Sardinia. Glencore will also potentially fund Li-Cycle’s share of the investment.

Li-Cycle’s rapid expansion has attracted the attention of short sellers, skeptical about its technology and development costs. However, in February the company received support from the US Department of Energy via a $375 million loan that will be used to build the Rochester plant.