Neometals

Neometals has developed and is commercialising three environmentally-friendly processing technologies that produce critical and strategic battery materials at lowest quartile costs with minimal carbon footprint.

Through strong industry partnerships, Neometals is demonstrating the economic and environmental benefits of sustainably producing of lithium, nickel, cobalt and vanadium from lithium-ion battery recycling and steel waste recovery. Reducing the reliance on traditional mine-based supply chains and creating more resilient, circular supply chains to support the energy transition. 

The Company’s three core business units are exploiting the technologies under principal, joint venture and licensing business models:

• Lithium-ion Battery (“LIB”) Recycling (50% technology) – Commercialisation via Primobius GmbH JV (NMT 50% equity). All plants built by Primobius’ co-owner (SMS group 50% equity), a 150-year old German plant builder. Providing recycling service as principal in Germany and commenced plant supply and technology licencing activities as technology partner to Mercedes-Benz. investment decision for Primobius’ first commercial 50tpd plant and JV with Stelco in Canada expected end 2023;
• Lithium Chemicals (70% technology) – Commercialising patented ELi™ electrolysis process, co-owned 30% by Mineral Resources Ltd, to produce battery quality lithium hydroxide from brine and/or hard-rock feedstocks at lowest quartile operating costs. Co-funding Pilot Plant trials in 2023 with Demonstration Plant trials and evaluation studies in 2024 for potential 25,000tpa LiOH operation in Portugal under a 50:50 JV with Bondalti, Portugal’s largest chemical company; and
• Vanadium Recovery (100% technology) – aiming to produce high-purity vanadium pentoxide from processing of steelmaking by-product (“Slag”) at lowest-quartile operating cost. Investment decision with JV partner, Critical Metals pending on planned 9,000tpa vanadium pentoxide operation in Pori, Finland (NMT 72.5% equity). Feedstock sourced under 10-year Slag supply agreement with SSAB and product offtake agreement with Glencore. MOU with H2Green Steel for potential second, larger operation in Boden, Sweden.

Neometals has pivoted away from reliance on upstream mining with the Company transitioned to generating value through the sustainable production of battery materials, sans mining.

The strength of the Company’s business case for success is supported by:

• A diversified ESG-aligned battery materials portfolio. Neometals has three maturing business units with the flagship battery recycling project operating commercially. All opportunities support decarbonisation and direct face the EV / energy storage megatrend;
• The Company has a track record of project execution success and experience working with global partners to fast-track outcomes and build/operate at a scale that is not dictated to by capital;
• A clear strategy with a proven, replicable and sustainable ‘project development’ model. The business model focuses on identifying opportunities, applying innovation to integrate down the value chain and partnering to de-risk. This model, proven at Mt Marion, can be replicated across the Company’s other growth projects; and
• Key projects leveraging strong innovation expertise being co-funded with leading global partners. Neometals has a long history of R&D and successful development has drawn significant commercial and delivery partners to de-risk commercialisation includes, but not limited to validation from, SMS group, Bondalti, Mercedes, Stelco, and Itochu. Key technologies are either patented or patent pending.

The Neometals shareholder value proposition is supported by:

• Track record of shareholder returns. Aligned management team and Board with experience identifying early-stage opportunities, de-risking via partnerships and diversification, R&D and delivering project outcomes which have resulted in returns. Specifically, A$82M in dividends / buyback / return of capital in the last 6 years;
• Strong balance sheet to fund developments. At DecQ 2022, NMT had ~$A42m, ~$A30m of investments and no debt. With a partner co-funding model borne in mind, it is in a strong position to finance projects to final investment decision (FID); and
• Strong Growth Potential. Across the Company’s three core projects it is exposed to a basket of the key critical battery materials which are all forecast to be significantly supply constrained. Each business unit is underpinned by a technology that is spawning multiple projects. The largest growth is seen in the global  rollout of the battery recycling technology, followed by vanadium recovery and the lithium chemical business. In addition, the Company has a ‘shovel ready’ legacy upstream asset that is likely to be divested.
• Flexible Business Models. Having inflexible revenue models when customer strategies in relation to the energy transition are often ‘fluid’ constrains opportunities. For this reason Neometals has kept its business model as flexible as possible and looks towards commercialising opportunities either as principle, with partners  that share economics or via a licensing approach.

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Funding and near-term catalysts

As of the end of the December 22 quarter, Neometals had ~$A40m of cash and $A30m of liquid investments. Across the three core business units, there are a suite of upcoming catalysts with all eyes on the pending battery recycling refinery ‘Hub’ cost study and plant purchase orders from Mercedes and Stelco.

The Company is well funded in the short term and a plant purchase order from Canadian company Stelco will trigger a 1-month option exercise window where Primobius (Neometals 50:50 recycling JV) can elect to buy up to 50% of Stelco’s special purpose battery recycling entity which presently has a licence over the recycling technology.

In addition to the Lithium-ion Battery Recycling business catalysts, Neometals is working towards electrolysis trials with Portuguese chemical major. Near-term feasibility outcomes will support trial outcomes to guide a Bondalti JV investment decision (Lithium Chemicals business).

The Vanadium Recovery business has finalised ‘slag’ offtake terms with steel maker SSAB, feasibility results are in the market and it had entered a JV with Critical Metals regarding Finnish vanadium chemical production. Certainty on debt and equity financing will support an investment decision to make first ‘slag’ purchases for stockpiling in Finland. Finally, Neometals’ legacy upstream asset, Barrambie, is moving towards finalising binding offtake arrangements for the titanium-rich concentrates it aims to produce.

ESG

Sustainability is not an aspiration for Neometals but rather it's core business. Rather than just generating materials that make their way into ‘green’ products, Neometals has also developed the underlying processes that support decarbonisation and the energy transition.

Generation of the materials provides an additional benefit. Unlike existing operations with carbon-intensive business units, Neometals has no carbon sins to atone and the drivers for development relate to the circular economy, raw material resilience, stakeholder expectations, safety, value in waste and cost reduction.

The Company has lodged three sustainability reports which outlines progress against targets and future goals and remains committed to improving year on year. The Company looks to design, plan, and give effect to projects that extract the maximum value from limited resources as efficiently as possible with minimal waste.