Aqua Metals, American Battery Factory plan recycling partnership  

US recycler and refiner Aqua Metals (NASDAQ: AQMS) and American Battery Factory (ABF), a lithium iron phosphate (LFP) battery cell manufacturer, announced Tuesday a proposed strategic collaboration focused on advancing a more competitive, domestic battery materials supply chain through recycling and circular manufacturing. 

Under a non-binding Memorandum of Understanding (MOU), the companies said they intend to evaluate the co-location of a commercial Aqua Metals lithium-ion battery recycling facility adjacent to ABF’s planned battery cell manufacturing operations in Tucson, Arizona.  

The proposed collaboration would enable Aqua Metals to recycle lithium-ion battery manufacturing scrap generated by ABF and return battery-grade lithium carbonate for reuse in US based battery production. 

The collaboration is designed to address a key challenge facing the US battery industry: how to economically process battery materials domestically rather than exporting manufacturing scrap and black mass to overseas markets, primarily in Asia, for conventional hydrometallurgical processing.  

Late last year, Aqua Metals signed a non-binding letter of intent with Westwin Elements, the only major US nickel refinery, to supply up to 1,000 metric tons of recycled nickel carbonate a year starting in 2027. 

The potential deal, valued at around $12 million annually based on current nickel prices, aims to strengthen domestic production of critical minerals. 

Integrating recycling with battery manufacturing

By integrating recycling directly with battery manufacturing, the companies aim to improve cost competitiveness, reduce logistics complexity, and strengthen domestic supply chain resilience. 

Aqua Metals’ proprietary AquaRefining technology replaces high-temperature furnaces and chemical-intensive hydrometallurgical processes with an electricity-powered, closed-loop system. This approach is designed to operate more efficiently in the U.S. regulatory and labor environment while creating manufacturing jobs and producing battery-grade materials suitable for direct reuse. 

“This strategic collaboration reflects our belief that domestic battery recycling must be economically viable, not just environmentally preferable,” Aqua Metals CEO Steve Cotton said in a news release. 

 “By working alongside American Battery Factory, we are evaluating a model that would keep valuable materials in circulation, support U.S. manufacturing jobs, and offer a realistic alternative to exporting battery scrap overseas for processing methods that simply do not translate well to the United States.” 

American Battery Factory is developing large-scale LFP battery cell manufacturing capacity in the United States, supported by federal and state initiatives aimed at expanding domestic battery production. Through the contemplated collaboration, Aqua Metals would develop a co-located recycling facility that would process manufacturing scrap using AquaRefining and supply battery-grade lithium carbonate back into ABF’s supply chain or to designated downstream partners. 

The MOU also outlines plans to evaluate a commercial-scale recycling facility capable of processing up to 10,000 metric tons of lithium-ion battery materials annually, including both manufacturing scrap and third-party feedstock.  

The companies are targeting 2028 for the start of commercial operations.