China’s CATL is planning to build a recycling factory for battery materials in the central Chinese province of Hubei. The group is planning a joint venture with the company Hubei Yihua Chemical Industry to recycle materials such as cobalt and lithium from used batteries of electric vehicles.
According to information from Reuters, the Chinese battery cell manufacturer estimates the investment in the planned factory at up to 32 billion yuan, the equivalent of around $5 billion USD. An engagement in the recycling sector is relatively new for CATL.
According to the news agency, among other things, new standards and guidelines formulated by the Chinese government to promote battery recycling and to save materials probably played a role in CATL’s investment decision.
The expansion of production capacity is to be accompanied by expansion to Japan, Indonesia, the USA and Europe, with Germany playing a key role in the European market. The background to this is the construction of CATL’s first production facility outside China, which started in Erfurt.
The groundbreaking ceremony took place there in October 2019, and completion is planned for 2022. The battery cells produced there will be supplied to BMW and Volkswagen, among others.
CATL recently acquired the Canadian mining company Millennial Lithium to secure raw materials for production. The takeover of the lithium producer is only the latest example of a series of investments that CATL has made in recent times to expand its supply chain vertically.
The battery maker recently bought stakes in Neo Lithium Corp, also a Canadian company, Greenland’s North American Nickel and Australia’s Pilbara Minerals, among others. Since April, a CATL subsidiary has also held a stake in China Molybdenum’s Kisanfu mine, a cobalt site in the Democratic Republic of Congo.