Neometals Secures Battery Recycling Contract with Mercedes-Benz

• Neometals' subsidiary Primobius has received a purchase order from Mercedes-Benz to supply a 10 ton per day lithium-ion battery shredding facility. This will be part of a larger closed loop recycling plant.
• The facility will be located in Kuppenheim, Germany and have an initial capacity of 2,500 tonnes per year. It will recover materials like lithium, cobalt, and nickel to supply Mercedes' EV production.
• The company views this as validation of its recycling technology and the start of a long-term collaboration with Mercedes-Benz as a customer.

About Neometals

Neometals Limited (ASX: NMT) is an Australian company focused on enabling sustainable production of battery materials. The company is commercializing three environmentally-friendly processing technologies to extract lithium, nickel, cobalt, and vanadium. With low-cost extraction and minimal carbon footprints, these proprietary methods offer a more responsible alternative to traditional mining-based supply chains.

Neometals' core business revolves around three incorporated joint ventures to commercialize these technologies:

• Lithium-ion Battery ("LIB") Recycling (50% technology share) – Offering recycling services, plant supply, and technology licensing via Primobius GmbH. Primobius' co-owner, SMS group, is a 150-year old German engineering firm that will construct the recycling plants.
• Vanadium Recovery (100% technology) – Aiming to produce high-purity vanadium pentoxide from steelmaking byproducts ("Slag") in Pori, Finland. Supported by a 10-year slag supply agreement with SSAB, Neometals holds a 72.5% equity stake in the planned 9,000 ton per annum operation. Investment decision expected in Q3 2023 with partner Critical Metals.
• Lithium Chemicals (70% technology) – Targeting production of battery-grade lithium hydroxide from brine and hard rock using the patented ELi electrolysis process, co-owned 30% by Mineral Resources Ltd. Pilot trials scheduled in 2023 to demonstrate feasibility ahead of potential commercial development in Portugal with Bondalti Chemicals.

Interview with General Manager of Commercial & IR, Jeremy McManus

Mercedes-Benz Purchase Order

Neometals has announced that it's 50% owned subsidiary Primobius GmbH has received receipt of a formal purchase order from Mercedes-Benz. Under the agreement, Primobius will create and install a 10 ton per day battery recycling "spoke" facility in Kuppenheim, Germany.

The spoke facility will utilize a shredding process to safely break down lithium-ion batteries into inert materials, eliminating any risk of fire or explosion. This shredding technology is provided by Primobius, a 50:50 joint venture between Neometals and SMS Group GmbH.

Significance of the Contract

According to Jeremy McManus, General Manager of Commercial & Investor Relations, Neometals' collaboration with Mercedes-Benz began approximately 18 months ago with a deal to supply equipment and technology to build a lithium-ion battery recycling pilot plant. This latest purchase order represents a milestone in that partnership, allowing Neometals to formally proceed with plans to provide key shredding and mechanical separation equipment for Mercedes-Benz's new facility.

The Kuppenheim plant will enable Mercedes-Benz to recover vital raw materials from electric vehicle batteries and manufacturing scrap. This supports the automaker's efforts to establish battery recycling capabilities and material supply resilience as it scales up electric vehicle production over the next decade. The plant is expected to have an annual capacity of 2,500 tons, recovering high value materials like lithium, cobalt, and nickel. The plant will generate a local supply stream to feed production of new Mercedes-Benz electric vehicles.

Next Steps

Supply and installation of the shredding circuit will commence in Q4 2023, with commissioning scheduled for Q1 2024. While initial capacity is only 10 tonnes per day, this "spoke" facility will generate crucial process data to inform Mercedes-Benz's recycling strategies moving forward.

Neometals also anticipates a subsequent purchase order soon for a connected "hub" facility to refine recovered metal salts. According to McManus, the spoke and hub will then "overlap one another" as the facilities are constructed and commissioned.

Upside for Investors

For Neometals investors, the Mercedes-Benz contract represents major validation from a global automotive leader. McManus also noted that it "provides a blueprint for further partnerships as electric vehicle adoption accelerates."

By working closely with Mercedes-Benz, Neometals can optimize its recycling processes and rapidly scale its spoke and hub model. The operational experience and data gained from the initial Kuppenheim installation will be invaluable for tailoring solutions to other major OEMs.

Long-Term Potential

While starting small at 10 tons per day, the strategic importance of the Mercedes-Benz facility is much larger according to McManus. The company anticipates significant growth potential based on projected figures of Mercedes-Benz needing to recycle up to 1 million tons of batteries per year by 2030.

Neometals maintains flexibility in its business models and global partnerships. Licensing its proven hydrometallurgy intellectual property is the priority, but plant ownership structures can be customized based on client needs and geographic locations.

Sustainable Approach

Neometals' technology stands to benefit all players in the EV supply chain. By providing local battery materials recycling, automakers like Mercedes-Benz gain visibility into future raw material availability. This promotes supply chain resilience and reduces reliance on uncertain market pricing.

Attractive Business Model

For investors, Neometal's licensing model offers substantial upside as electric vehicle adoption grows exponentially in the coming decades. The Mercedes-Benz project will allow Neometals to refine process economics and profitability projections. Successfully demonstrating its technology with a respected global brand should accelerate commercialization and additional OEM partnerships.

Conclusion

With the EV revolution still in early phases, Neometals is positioning itself at the forefront of sustainable battery materials production. Its collaboration with Mercedes-Benz is a strong validation of its technology and business model. Investors should monitor the strategic Kuppenheim facility as an indicator of the company's ambitious global growth potential. Sustainability principles and shareholder returns can go hand-in-hand.