Investor Alert: “Battery mining” is about to become big business and you don’t want to miss the boat
Rather than do what most investors did in 2014, when it really began to look like Elon Musk’s Tesla Motor was going to make something of itself, I didn’t invest in Tesla stock. Instead, I asked the same questions that many investors asked when Henry Ford changed the world with his revolutionary Model T back in 1908: What is needed for this company to succeed, in terms of equipment or raw materials? And who makes those things?
Whereas these questions led many a Model T enthusiast (including Ford himself) to invest in things like rubber plantations (for tires), steel mills (for body frames), and oil refineries (for fuel and lubricants), they led me to invest in miners of lithium, the silver-white metal for which lithium-ion batteries are named, and which nearly all electric vehicles and the majority of stationary energy storage systems are dependent upon.
As I dug deeper into the electric vehicle and energy storage supply chains over the next couple years, I learned of other metals that went into lithium-ion batteries, such as cobalt, nickel, graphite, manganese, and aluminum, as well as a major one that electric vehicle charging infrastructure is entirely dependent upon, namely copper. Before I knew it, I found myself overwhelmed with ticker symbols for hundreds upon hundreds of publicly-traded companies that could provide me exposure to these so-called “battery metals.” And then, just when I’d thought I couldn’t be any more inundated with information than I already was, I stumbled upon a company called American Manganese.
This company was not interested in recovering battery metals from the ground, like most of the companies I’d already invested in were, but in recovering them from a place where seemingly no one in the Western world had seriously ever thought to look before: The batteries themselves. In other words, and as Larry Reaugh, the President and CEO of American Manganese likes to say, the company is in the business of mining batteries, or what some people like to call “urban mining”.
Now, when I first heard this, I wasn’t aware that less than 5% of the world’s lithium-ion batteries are currently recycled, that 11 million tons or more of spent lithium-ion batteries are set to be discarded between now and 2030, or that even the best recycling technology that has existed to this point is completely incapable of recovering the lithium from these batteries. Furthermore, and until the U.S. Department of the Interior filed its list of the 35 minerals/metals it has deemed critical to United States national security in May of 2018, I had no idea that the U.S. is dependent upon other countries for over 50% of its annual lithium needs, 74% of its cobalt, and all of its graphite and manganese—all of which are contained in these increasingly valuable batteries, which the U.S. has, for lack of an ability to process them itself, been shipping out of the country and into China for both disassembly and recycling, never to be seen again (unless it’s in the form of an IPhone battery they eventually sell back to Apple).
As I got to thinking about all the ways in which American Manganese’s technology could help not only the environment, but the U.S. economy and national security situation as well, I also began thinking, “How many other companies are out there that are into this ‘urban mining’ thing?” And that got me to do some Google-searching—and what I found surprised me:
American Manganese is the Only Pure-Play Battery Recycler on the Market
American Manganese, which trades on the U.S. OTC market under the ticker symbol AMYZF, on the Toronto Venture Exchange under the symbol AMY, and on the Frankfurt Stock Exchange under the symbol 2AM, is truly the only publicly-traded, pure-play battery recycler (or “urban miner”) out there. And when I say “pure-play”, I want to be clear as to what I mean by that: I mean a company whose primary focus is the recycling of lithium-ion batteries, the type of which are utilized primarily by the electric vehicle and energy storage industries.
Please note that while American Manganese does have “competition” in the battery recycling space in general, with much of it coming out of Asia, in the form of smelting operations that are as environmentally-unfriendly as they are wasteful, it has almost zero competition when it comes to its patent-pending (and soon to be officially patented), hydrometallurgical process, which not only recycles lithium-ion batteries in an environmentally-friendly way, but is capable of recovering 100% of cathode materials, including, most notably, both lithium and cobalt (the prices of which have both gone through the roof in recent years).
The closest competitors the company has, by my estimation, are Neometals Ltd, based out of Sydney, Australia (which trades under the symbol NMT on the Australian Stock Exchange, the symbols RRSSF and RDRUY on the U.S. OTC market, and the symbol 9R9 on the Frankfurt Stock Exchange) and a trio of private companies—Li-Cycle Corp, based out of Ontario, Canada, Retriev Technologies, based out of Anaheim, California, and Battery Resourcers, based out of Worcester, Massachusetts—all of which use hydrometallurgical processes similar to (but not the same as) American Manganese’s.
Being the only company out of the above-mentioned four that is publicly-traded, Neometals, is the only one I can seriously consider as competition for American Manganese when it comes to my investment dollars. Interestingly, they’re supposed to be finishing up a pilot program for their recycling process in Montreal this quarter, and they claim that it can recover 99.2% of cobalt from spent lithium-ion batteries, but at the same time they are suspiciously mum when it comes to lithium recovery. For this reason, I refuse to invest in them, based on their recycling technology alone. Simply put, I don’t like secrets.
Another reason is that while they are into recycling, it is clearly not their primary focus, hence why I do not consider them a pure-play battery recycler by any means. Their primary focus, as evidenced by their recent news releases, is clearly the combination of their Mt Marion lithium mine in Western Australia and a proposed lithium hydroxide plant in Kalgoorlie. Accordingly, if I were to invest in them, it would be for their lithium-related operations, and not for their recycling process, which I fully expect them to spin off (or even sell to American Manganese, or someone like them) in the very near future, similar to how they they’re working on spinning off their Barrambie titanium-vanadium project, which they now consider “non-core.”
As for Li-Cycle, Retriev, and Battery Resourcers, and perhaps because of their private nature, they are even more secretive when it comes to their processes than Neometals. Other than stating that they have an “innovative process to address the emerging international demand for better systems to recycle lithium-ion batteries”, Li-Cycle hasn’t provided much information on this process to the public. Similarly, Retriev, while claiming that it has “been recycling lithium batteries for over 20 years”, provides no details as to how exactly their process stacks up to anyone else’s, and Battery Resources is completely silent on how much of any particular metal they’re able to recover. In any event, none of that matters much to me personally, because, being that they’re all private, I can’t (as a retail investor) invest in them anyway.
Having said all of that, there is one other company involved in lithium-ion battery recycling I really should mention, and that is Umicore N.V. (which trades under the symbols UMICF and UMICY on the U.S. OTC market, the symbol UMI in the Brussels-based EuroNext market, and the symbol NVJP on the Frankfurt Stock Exchange), if for no other reason than that they were recently identified by a spokesman for South Korean battery giant Samsung SDI as a “leading recycling firm”, in the same breath as American Manganese.
This company, based out of Brussels, Belgium, is a multi-billion-dollar, multinational materials technology company which derives most of its revenue not from recycling but from the refining of various metals, the manufacturing of specialized metal and metalloid products, and its largest revenue generator, automotive catalysis. Accordingly, if I, as an investor, am looking for a “pure-play” battery recycling investment (which I am), Umicore is clearly not it, regardless of what Samsung may think. Other disqualifying factors, which make the company uninvestable to me personally are that 1) their recycling process involves smelting, which is not environmentally-friendly (despite what the company claims), 2) it wastes 40-70% of the cobalt, nickel, and copper the company claims to recover, 3) it doesn’t recover any economical amounts of lithium, and 4) it isn’t patentable.
Rounding out my list of indirect competition for American Manganese are some unsung researchers, working for the likes of the International Islamic University of Malaysia and the University of California-San Diego, none of which I can even take into consideration when it comes to investing, for obvious reasons.
Putting all of the above together, my takeaway, as an investor, is that the only battery recycler on the planet, worthy of an investment based on its recycling technology alone, is American Manganese. While I’d love to consider Neometals a close second, I just can’t, because they’re simply not a pure-play recycler, and when it comes to lithium miners/explorers, I already own shares in a few other companies that I also like better than Neometals, for reasons I will not get into in this post.
Having said all that, this is not investment advice, especially whereas I am not a licensed financial or investment advisor, and anyone reading this post should do their own due diligence/research on all of the companies named above and/or consult with a licensed professional prior to making any investment decisions based on what they’ve read here today.
Personally, I have decided to invest in American Manganese, for a number of reasons:
- They are easily the most transparent when it comes to their technology (the pending patent for which can be viewed at https://patentscope.wipo.int/search/en/detail.jsf?docId=WO2018089595)
- The patent on their process is due to be issued really any day now
- Their President and CEO, Larry Reaugh, goes above and beyond to keep his investors abreast of developments at the company, via a weekly podcast he does with HoweStreet.com
- They’ve been working diligently on a pilot plant program for their process for the past few months
- They’ve been in close and constant contact with battery producers, cathode scrap suppliers, and electric vehicle manufacturers for the last several years
- They have a background in manganese mining that gives them an advantage over other battery recyclers who have no background in the actual, physical mining of metals from the earth
- Their process is very clean and extremely environmentally-friendly, unlike most of the so-called “battery recycling” that’s done these days, which isn’t so much “recycling” as it is melting metal into a slag pile and maybe, if a “recycler” is “lucky”, capable of recovery a very small amount of certain metals, which does not include lithium
- Battery “megafactory” owners and planners all around the world (such as Tesla, Samsung SDI, and Northvolt), as well as electric and autonomous vehicle manufacturers, have made clear that they would like to be able to recycle all of their own batteries in-house, using technology like American Manganese’s
In conclusion, if you’re a battery metals investor like me, you owe it to yourself to do your own due diligence on American Manganese, as well as the other companies I’ve mentioned in this post, if for no other reason than to acquaint yourself with the fact that there are more ways than one for us to acquire the metals we need to fuel what many (including me) are calling “the electric revolution.” And if you’re an environmentalist/activist investor who is looking for a way to get exposure to the electric vehicle and energy storage supply chain in an environmentally-friendly way, which doesn’t involve directly investing in an EV maker, then you owe it to yourself to do the same, because when it comes to where our battery metals come from, you can’t do a whole lot better than looking at a company that gets them back from toxic and highly-combustible batteries that, if it weren’t for companies like American Manganese, would end up in landfills or ill-equipped recycling centers, where they could injure not only the environment, but us humans as well.
Disclosure: I am long AMYZF.
I wrote this article myself, and it expresses my own opinions. While I am not receiving compensation for the article itself (other than from/through New Energy Narrative, which I am the founder and owner of), I have been compensated by American Manganese for featuring their banner advertisement in the upper third of the article.
Please note: This article discusses small-cap stocks trading at less than US $1 per share and/or with less than a US $100 million market cap. Please be aware of the risks associated with these stocks.