One of them is that a lithium-ion recycler cannot store its feedstock, the end-of-life and production scrap, at the same location that they process it. Unless, however, the company also has a permit from the EPA as laid out in the Resource Conservation and Recovery Act (RCRA), a federal law governing hazardous waste.

That permit is referred to as a RCRA Part B permit and would allow them to run a location as a Treatment, Storage, and Disposal Facility (TSDF). Such a permit exempts the recycling equipment and allows them to store the feedstock free of most time constraints.

But what one company, American Battery Technology Company, had been doing is using what is called a just-in-time schedule where in Nevada from the time they receive the material to the time the material is processed has to be 24 hours or less.

The EPA classifies lithium-ion cells that are being transported for the purpose of recycling as hazardous solid waste because they exhibit specific characteristics such as they are ignitable or they are reactive. Now, there is an alternate set of rules known as universal waste management, which is meant to promote recycling by lowering the operational and storage burdens for what are classified as large quantity handlers of universal waste (LQHUW).

These LQHUW can collect, sort, store, and can even remove the electrolyte if the cell is closed back up, without falling under the normal hazardous solid waste regulations. But that all stops the moment the feedstock hits the receiving bay at the recycling facility.

This is why state and federal authorities require lithium-ion recyclers to obtain a TSDF permit, though whether the state environmental agency or the EPA issues that permit depends on state authorization, as some states defer to the EPA or share jurisdiction under RCRA.

However, while federal regulations do not specify an exact time allowed to hold the feedstock prior to processing once it is accepted at the facility, a regional EPA office or a state agency through their interpretation of federal codes may establish a site-specific allowable holding time for storage of that feedstock before it has to be processed.

That is the just-in-time setup.

Back to the topic of ABAT and why I used the phrasing “had been doing” because that looks to have changed when ABAT purchased another location in March 2026, which makes them the owners of four locations in Nevada that falls under the company’s recycling vertical umbrella.

There is, of course, the main location referred to as the TRIC facility, along with an empty lot on Sydney Drive by one of the security gates for Tesla’s Nevada Gigafactory, the property in Fernley that was under construction as the original site for the company’s recycling operations before they purchased the TRIC location. Now the company has this new property and it is located right next door to the TRIC facility.

A screenshot from google maps.

They bought this location for $2 million and it that looks to be part of a larger complex that also has a battery wholesaler.

This location has the EPA designation as “ABTC Peru Drive Feedstock Storage” with the EPA Registry ID: 110072137004. The North American Industry Classification System (NAICS) is the code used by federal agencies to classify business establishments by type of economic activity, and for this location it is 562112 Hazardous Waste Collection.

This would allow them to move away from the just-in-time schedule for at least what is considered non-damaged, defective, or recalled material, which the modules from the Moss Landing site would be classified as, so for regular feedstock this location could in theory give them some breathing room.

Since the NAICS code is 562112. These are the activities that would be conducted at that location:

• Hazardous waste collection services

• Radioactive waste collecting and/or local hauling

• Hazardous waste hauling (local)

• Operation of hazardous waste transfer stations

• Collection and transportation of industrial hazardous waste

• Medical and healthcare hazardous waste collection services

This location does not have a RCRA Part B permit used for TSDF, which would use NAICS code 562211 Hazardous Waste Treatment and Disposal. Instead, since it has NAICS code 562112, Hazardous Waste Collection, it falls under different usage rules, ones that only allow temporary storage.

Under approved activities like hazardous waste collection services and collection and transportation of industrial hazardous waste, the facility at 3400 Peru Dr. operates under 40 CFR 263.12(a). This RCRA provision codified into federal law allows a transporter to store hazardous waste in containers at a designated transfer facility for 10 days or less without triggering full TSDF permitting and other related regulatory provisions outlined under RCRA.

If material remains on site for more than 10 days, the location becomes subject to full TSDF requirements unless an accumulation time limit extension is granted by the EPA or the state.

Ten days is better than 24 hours, and this also gives them the ability to better coordinate with OEMs to make sure that they can receive their material in a more timely manner.

This would also indicate that at current operating throughput, a $2 million expenditure was worth adding 10 days of storage to the Nevada recycling vertical. This may have been a direct result of the volume of material from Moss Landing, or it might be that they were unable to fully meet their clients’ needs with a just-in-time schedule due to capacity constraints, and that storage allows more flexibility for their clients and for the company to better meet their recycling needs.

One of my concerns was that due to capacity constraints, ABAT might struggle to expand and grow their clientele, but adding this storage could be part of the solution. As I have said before, as problems go, having more feedstock than you can process is not a bad one to have.

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DISCLAIMER: This article should not be construed as an offering of investment advice, nor should any statements (by the author or by other persons and/or entities that the author has included) in this article be taken as investment advice or recommendations of any investment strategy. The information in this article is for educational purposes only. The author did not receive compensation, from any of the companies and or persons mentioned to be included in the article.

The Bureau of Industry and Security (BIS), an agency in the Department of Commerce, issued a new temporary rule, the Directive Allocation Order and Additional Requirements for Recoverable Critical Minerals and Materials, which provides a legal definition of black mass within the context of the rule.

For purposes of this Directive Allocation Order, ‘black mass’ means any shredded lithium-ion battery scrap that contains cathode material (which may include lithium, cobalt, nickel and manganese), anode material (graphite, silicon) or other residual battery cell materials.

While that definition explains what black mass is made of, it doesn’t show why it’s critical to the domestic supply chain or where and how it fits into the lithium-ion industry.

A recycler’s feedstock comes from two main sources: end-of-life batteries, or manufacturing scrap generated during production. Manufacturing scrap is further split into two categories: dry scrap (foil clippings and components produced before electrolyte is added) and wet scrap (material rejected after the electrolyte is injected).

Unlike what the general public believes, while the electrolyte contains lithium, it is not the lithium itself that poses the highest safety risk during recycling. Rather, the electrolyte itself does. When heated or exposed to air and moisture, the chemicals in the electrolyte break down into toxic, flammable gases. The severity varies based on chemistry and state of charge.

High-nickel versus lithium iron phosphate chemistries produce different gas profiles. State of charge determines not just how much gas is produced, but which gases and at what concentrations, with specific test data showing that lower state of charge thresholds in chemistries like lithium iron phosphate can yield distinct toxic gas concentrations compared to higher-charged ternary cells.

However, you can’t just crack open a battery, dump the contents into a bucket, and feed the materials into a lithium-ion production line. The materials are physically and chemically locked into complex structures. That is where the mechanical component of lithium-ion recycling comes into play. After disassembly, the cells are shredded, and that is when the black mass is created.

But why shred?

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Instead of remitting payment, Tysadco filed counterclaims in an effort to shift its losses back onto ABAT. Tysadco alleged that ABAT and its CFO, Jesse Deutsch, fraudulently coerced them into executing those agreements by pointing to an October 2023 text message where Deutsch remarked he would “cover the losses later” on prior trades.

Beyond claiming ABAT reneged on an oral promise to “make Tysadco whole,” Tysadco leveled counterclaims of fraud, negligent misrepresentation, and Nevada state securities violations, arguing ABAT used their capital to quietly satisfy obligations to third party funds like High Trail Capital and H.C. Wainwright.

In late 2023, ABAT issued senior secured convertible notes to High Trail Capital to access up to $51 million in debt financing, receiving $37 million across two initial tranches. These notes carried toxic liquidity thresholds and debt covenants that created ongoing pressures for day to day operations. Tysadco seized on this dynamic, alleging that Jesse Deutsch made informal, unwritten promises to secure Tysadco’s capital quickly to avoid a covenant default.

However, ABAT systematically eliminated that debt position over the following years. After paying down $31.5 million in cash toward the principal, the company extinguished the remaining $8 million of the High Trail 2024 Notes through equity conversions in mid 2025, issuing roughly 9.5 million common shares across July and August.

By converting those final notes, ABAT released restricted cash reserves, removed High Trail’s restrictive covenants, and completely cleared the debt from its balance sheet. This successful payoff neutralized Tysadco’s argument that ABAT was facing an unmanageable debt crisis or engaging in a fraudulent scheme to keep the lights on.

On August 5, 2026, Chief U.S. District Judge Miranda M. Du ruled in favor of ABAT in its original lawsuit, ordering Tysadco to pay $1,436,392.80 for breaching its stock purchase agreements and dismissing Tysadco’s counterclaims of fraud and misrepresentation.

Under Nevada law, unwritten side communications and informal text exchanges cannot modify fully integrated, written contracts that explicitly place market risk on the buyer. ABAT exposed the core contradiction in Tysadco’s stance by showing how Tysadco portrayed its owner as a savvy, decades-experienced trader while simultaneously claiming he was bamboozled into taking on unwritten downside risks.

Furthermore, by eliminating those debts, ABAT demonstrated to the court that its liabilities were far from unmanageable, leaving the company with no share-related debt beyond standard warrants and employee share-based incentives.

This closes out the primary growing pains era that the company experienced as it transitioned away from being an OTC listed speculative play. Early on, the only available financing came through toxic notes, a practice common with OTC stocks, alongside reliance on relationships with entities like Tysadco that ultimately resulted in massive dilution for retail investors.

Now, the company has been added to the Russell Indexes and several ETFs, sitting at around 46% institutional ownership according to Fintel, demonstrating its maturity in acquiring capital through the equity market.

I want to give a shout-out to the Tinfoil Hat and Mayonnaise Society (I know a silly name but long term investors will get the inside joke), who over the last 4-5 years have worked to help keep retail investors of ABAT informed. This is an example of the news they make me aware of.

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DISCLAIMER: This article should not be construed as an offering of investment advice, nor should any statements (by the author or by other persons and/or entities that the author has included) in this article be taken as investment advice or recommendations of any investment strategy. The information in this article is for educational purposes only. The author did not receive compensation, from any of the companies and or persons mentioned to be included in the article.

Yes, that is the title of the Presidential Memorandum, but what does it mean?

Basically, it takes the 60 countries that the United States has the most trade with and adds a new Section 301 tariff starting at 10% for some countries and up to 12.5% for others. The premise is that these countries are not doing enough to curb forced labor and that directly affects the United States’ economy.

And yes, it stacks with other tariffs and just like other Section 301 tariffs if in the future the U.S. trade representative decides changes need to be made, they can go back and adjust them.

What this tariff is really targeting are textiles, apparel, agricultural products, and manufactured consumer goods. The Executive Action and the new Section 301 tariffs are not specifically targeting critical materials. It’s more of a reciprocal tariff replacement for imported consumer goods.

The goal of the Trump administration since the election has been to re-onshore manufacturing, using tariffs as the stick. Mostly, however, it has been akin to the administration jumping in the car, putting it into reverse, and gunning it, ignoring that the garage door is closed, slamming it into drive while a section of the garage door blocks the windshield, racing down the street, and eventually taking out the bus stop at the intersection. At least this time they are using the tools set up for them instead of trying to redefine the legal meaning of a word.

To see if it lined up with the old reciprocal tariffs, because really, all of this is just a way to bring back the tariffs struck down by the Supreme Court, I sorted through the annex included with the executive action, spent the day looking at critical minerals on that list, yelled at AI for not being able to tell me which HS codes were for what, and fell down a rabbit hole of legal and policy websites until I found the HS codes I needed.

And for now, when it comes to critical minerals, there are very few that are not exempted from their raw forms to their processed forms. This is in line with the old reciprocal tariffs and was expected; the goal is to re-onshore manufacturing, and this is a tad easier if you do not have to pay extra for the raw inputs you need. But that applies to raw materials and processed chemicals; parts, engineered materials, and the like were never exempted then and are not now.

There are two key materials for lithium-ion batteries that are not exempted. The first is synthetic graphite, which makes sense since that looks to be a product oil companies like ExxonMobil are planning to bring to market using their refining waste as the feedstock.

The second is that while raw phosphate is on the exemption list, the processed forms of it needed to produce the pCAM for lithium iron phosphate are not. It is going to be interesting to see how considering the pivot in the U.S. by legacy cell manufactures and automakers from ternary to LFP how they will react to this.

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Of course, since I am prone to rambling, my new post was too long for X, so I decided, something I should have done in the first place, is to rework it as an article for the Critical Materials Bulletin.

So how do I know that the text in what I could see of the report was AI, it is pretty easy to spot near the start of the report before the paywall, there is two paragraphs which are versions of the same boilerplate wording I see in a lot of reports and articles about the economics of lithium-ion recycling.

First, they have this:

The industry’s biggest challenge is securing its feedstock, which is the supply of batteries that have reached the end of their service life. Most electric vehicle batteries are still in service, leaving recyclers dependent on manufacturing scrap until larger numbers of batteries reach the end of their lives in the mid-2030s. That timing mismatch has contributed to financial struggles for battery recyclers, even as substantial investment has poured into the sector.

That is absolutely correct, lithium-ion cells are lasting much longer than the 8 to 10 years many estimated just a few years ago, with it now looking like 12 to 15 years before traction batteries reach the 80% end-of-life capacity threshold. While some suggest that leasing and high demand for battery materials might eventually mean EVs will only see one owner before being recycled, that scenario remains a hypothetical for now.

Because of this unexpected longevity, the primary feedstock for lithium-ion recyclers currently comes from two sources: manufacturing production scrap and decommissioned ESS modules. The cells in these modules contain older ternary chemistries that have reached their end-of-life or are being actively replaced with LFP due to thermal and safety concerns.

And really that is all that is correct in that paragraph, but I will go into more of that later, but that segues us right into the next paragraph:

The shift to lithium iron phosphate (LFP) batteries is reshaping recycling economics. LFP batteries are attractive to automakers because they are less expensive, longer-lasting and avoid cobalt, but they contain fewer high-value materials, forcing recyclers to find new sources of revenue through graphite recovery, battery-grade chemicals, and other higher-value products.

LFP cells now make up 55% of the EV market in China and are the dominant chemistry for ESS, but the sector still has the same problem laid out above, except when it comes to the cells in a ESS it could be even longer with 15 to 20 years before they hit end-of-life and need to be recycled.

Also, on this wording “contain fewer high-value” that is AI hedging the text. Besides lithium, there are no other high-value materials in the cell. You do have copper from the anode, which one could argue is high-value, but the main thing with LFP and profitability is efficiency, but even with that, recyclers who have reached minimum scale for profitability because of efficiency will not touch LFP unless it is done through a fee model, it is that fee model that insulates them from the volatility of the battery metals market.

There is a possibility that a government agency could subsidize the recovery of phosphate, and the Department of Defense is all about that phosphate right now.

But it really does just come down to efficiency and the ability to use a fee model.

On this “other higher-value products” battery-grade is the higher-value product, and there really is just the graphite, the lithium, and the iron phosphate battery-grade versions. I guess a company could lump recovery and distilling of the electrolyte chemicals into that; There is a German company that offers a black mass production platform that does have some of that, but really it is just those three items.

But the real problem with the text is they are treating LFP like a separate challenge when it is really just another contributor to the first underlying problem. Lithium-ion cells are lasting longer than people expected, but “mid-2030s” is once again AI hedging the text, at least when it comes to ternary cells, LFP that sounds about right for when those cells will start to trickle in.

There was a report from 2022 by the Congressional Research Service - Critical Minerals in Electric Vehicle Batteries:

The growing number of EV batteries expected to reach their end of life (EOL) represents opportunities and challenges. Domestically, 200,000 metric tons of EV batteries are expected to reach EOL by 2027, or 800,000 metric tons globally that year, with accelerating growth as EV penetrate vehicle markets.

Because of many factors, that may not be a reality for domestic ternary cells till 2029 or so. But those cells will eventually like a rogue wave, show up, and unlike many suggest, they are not going to end up in a landfill, stranded perhaps at an auto wrecker, which by the way the new bill from Colorado does a horrible job trying to remedy even if everyone is praising it for doing that.

And that is the real problem, those cells will start to show up in semi-trailers at recycling facilities, and right now the United States lithium-ion recycling infrastructure is pathetically unprepared for it, with the latest IEA report placing 5% of global black mass production in the United States, alongside less than 1% of the global capacity to produce battery-grade material from that black mass. And currently I do not see that battery-grade capacity going up enough to be even a full percentage point in the next 2 years.

Heck, the only company in the United States that was able to produce battery-grade lithium carbonate at commercial scale from recycled material ended up going bankrupt due to gross negligence of its management.

And there is a question now about whether the new company that has taken over will be able to continue its operations or be shut down due to a law passed in 1976 that was intended to cover waste disposal, not reclamation. We will have to see what Georgia’s version of the EPA thinks of them storing material in semi-trailers in a leased parking lot.

The largest lithium-ion recycler in the country announced that they have found that using old cells in ESS is a much more economical route than recycling them. Consequently, those cells are basically being stockpiled instead of being processed into materials that could otherwise be injected into a supply chain still dependent on foreign imports for 99% of its lithium. Sure, it is a great way to monetize future feedstock until they are actually able to process them, but it really amounts to kicking the can down the road rather than helping to develop a domestic battery materials supply chain.

Then you have one company dealing with a state EPA entity that cannot answer a simple question on destination facilities, and for them the best route may be buying a half-completed facility where at one point the original owner had people wandering around for hours trying to find equipment that was listed as installed.

And this doesn’t even touch on how another company is looking to set up shop in California to produce black mass. What's the problem with that, you may ask? The company itself is just a shell that has really only one thing going for it a pre-established corporate infrastructure for exporting to Asia that they picked up by doing an acquisition of another company.

Sorry, I started to go off on a random diatribe on some of the real issues the lithium-ion recycling sector is facing today.

But by the time significant amounts of LFP hit end-of-life, the North American lithium-ion recycling sector will have years under its belt to prepare itself for that wave, with appropriately sized facilities that will have allowed recycling firms to reach the minimum scale needed for profitability no matter the chemistry.

And that is just some of the reasons I know that report is just AI nonsense.

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Section 1412 of the FY2026 NDAA expands the Strategic Materials Recovery and Reuse Program for recycling and recovery of critical minerals. The DOI issued a Secretary’s Order to streamline regulations on recovery from mine waste. All of this points toward material recovery as part of the strategy to reduce the dependence on foreign critical minerals.

When it comes to the Department of Energy, the agency long positioned as the primary source of funding and guidance for critical materials, is now taking a back seat. They are providing funding to expand and develop materials from secondary sources, but most of this targets new technologies and pilot programs rather than commercial scale facilities.

After Ascend Elements and a few other projects, it seems that outside of nuclear and fossil fuels, the current administration’s DOE has lost its appetite for funding projects that utilize unconventional resources.

But beyond funding, for lithium-ion recycling, there is a problem buried in federal waste regulations, Representative Mariannette Miller-Meeks (R-IA) stated:

End-of-life batteries and scrap materials are largely sent overseas, often to China, for processing. Our own regulatory scheme under RCRA is contributing to this.

The way these rules are written, they inadvertently promote, due to financial reasons, the export of much-needed battery materials instead of allowing them to be recovered and reused in the US, creating both economic and national security concerns.

This is a real-world example of how one outfit, American Battery Technology Company, is running into that regulatory wall.

ABTC:

We had asked about requirements for a destination facility on our last call, is there any further information on this process?

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But first, let’s explain what a consumption tax is, and why it’s different from a VAT:

A factory in China makes lithium-ion batteries. Every time it sells a batch, it owes the government a percentage of the sale price as a tax. Imported batteries get taxed the same way, but at customs when they cross the border.

VAT works differently. It’s charged at every stage of production and distribution, not just at the final sale. The VAT and the consumption tax stack on top of each other and get bundled together into the final market price.

Back in 2015, China decided to exempt lithium-ion alongside other technologies, and the public reasons will vary, but the main one is they wanted to keep prices low to encourage adoption. What the new tax is, is 2% for now, jumping to 4% in a year. Yes, this makes lithium-ion more expensive, but that cost alone won’t push countries toward alternatives like sodium-ion, which would still depend on Chinese supply chains and technology infrastructure anyway.

Right now, looking at the US, importing lithium-ion cells is still cheaper than producing them domestically, even with tariffs factored in. The main reason is that the US still has to import the bulk of all components needed to produce cells, not just the lithium. Labor and manufacturing costs play a role, but China’s integrated supply chain advantage is what really drives the cost difference. Add it all up and a cell produced in the US costs significantly more than one imported from China.

The 2% consumption tax indirectly creates an incentive for onshoring those imported engineered components. So why would China add this tax? In China, mainstream EVs don’t need subsidies anymore, and the government is shifting its strategy. China’s battery makers operate in a landscape that was created via sanctioned overcapacity where many companies must export products to maintain margins, leading to price wars. By imposing this tax, Beijing is squeezing low-margin manufacturers to force industry consolidation and curb “involution-style” competition.

Add this tax with recent policies around foreign entities of concern (FEOC), you can look at the FY 2026 NDAA and the OBBB to see examples, coupled with manufacturing tax credits, and if anything you have a stronger thesis for a growing investment in lithium-ion manufacturers in the United States and the development of a domestic supply chain upstream of them, not a incentive to switch to an alternative.

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DISCLAIMER: This article should not be construed as an offering of investment advice, nor should any statements (by the author or by other persons and/or entities that the author has included) in this article be taken as investment advice or recommendations of any investment strategy. The information in this article is for educational purposes only. The author did not receive compensation, from any of the companies and or persons mentioned to be included in the article.

Stripped down, it is a basic sulfuric leach platform. Instead of precipitating metals out as powders, they use electrowinning for the transition metals and an electrochemical step for the lithium. That electrochemical component might also be on the back burner, given their pivot from a hydroxide to a carbonate.

They have gone from trying to produce pure battery metals and lithium hydroxide monohydrate, to aiming for lithium carbonate alongside a mixed hydroxide precipitate (MHP), to now simply wanting to start over as a black mass producer.

Aqua Metals is advancing a phased commercial strategy that begins with battery preprocessing and black mass production and is designed to progressively integrate AquaRefining

To pull this off, they are completely ditching their original rollout plans and working on a move to a 150,000-square-foot facility on over 50 acres out in the Midwest battery corridor. They plan to launch operations as a basic black mass and low-value material producer (e.g., copper and aluminum) right out the gate, pushing their core AquaRefining technology to later phases.

This is a strategy that many cradle-to-gate lithium-ion recyclers who plan to offer a complete recycling solution from collections to waste to battery grade are using, but in the US, it has seen very little success as of yet when it comes to a transition from demonstration or pre-commercial scale to profitable commercial-scale production of battery grade.

The entire PR is basically a story about how they need to reinvent themselves yet again just to move forward, this time with a focus on LFP. The heavy hedging in the release, which is laced with words like diligence, evaluating, planned, subject to, intended, expects, potential, and proposing, makes this look a lot like a last ditch effort to pivot from R&D to a commercial scale that can actually keep the lights on while they figure out how to monetize their AquaRefining platform.

As for the actual black mass production setup, it looks like they will be running a basic system that incorporates some form of early stage lithium recovery (ELSR).

Aqua Metals’ initial commercial strategy is focused on recycling LFP materials and recovering battery-grade lithium carbonate from black mass, with the potential to add additional chemistries and recovery pathways over time. Following the planned scaling of preprocessing operations and lithium carbonate production, Aqua Metals expects to add processing capabilities for nickel manganese cobalt, or NMC, and other lithium-ion battery chemistries by leveraging its patented AquaRefining™ technologies, which have been proven at demonstration plant scale.

Now, that part does perk my interest somewhat. Current bicarbonate pathways for ESLR struggle when it comes to LFP. You see a few workarounds out there, like using a highly selective solvent to pull the lithium away from the iron phosphate matrix before stripping it out with a diluted acid wash.

They could also go with a mechanochemical route, tossing some sodium carbonate into a ball mill and using pure kinetic energy to warp the LFP crystal structure and force out a lithium carbonate.

If they actually choose an innovative path like that, or plan to build a genuinely advanced black mass production platform, they might catch my attention. But as it stands right now, there just isn’t much here to look at.

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DISCLAIMER: This article should not be construed as an offering of investment advice, nor should any statements (by the author or by other persons and/or entities that the author has included) in this article be taken as investment advice or recommendations of any investment strategy. The information in this article is for educational purposes only. The author did not receive compensation, from any of the companies and or persons mentioned to be included in the article.

First, what do they do? Well, this links back to something I posted about last week. Blue Whale Materials produces black mass from end-of-life lithium-ion batteries.

When people talk about battery recycling, this is a stage that is often dismissed as easy. The common mental image of this step is pretty straightforward, but mechanically, it can actually be one of the most complicated stages in the entire recycling train, and it can absolutely make or break the downstream processing.

Sure, producing low-quality black mass is easy. But what Blue Whale is focusing on is ensuring that the subsequent hydrometallurgical stage can be streamlined and financially viable.

On paper, their process looks rather simplistic, and I apologize to anyone who works at Blue Whale for this over generalization, but at its core, the mechanism is essentially: poke the cell, dunk it in a tank, then bake it. This is followed by size reduction and low-value component separation.

However, if you zoom out, what you actually have is a process pulling off an incredibly delicate balancing act. They are tightly controlling emissions while simultaneously reaching the optimal level of thermal reduction and mechanical processing required to create high-quality, low-impurity black mass, a product they market as Black Sand.

One of the major challenges for any lithium-ion recycler is the ability to produce a consistent profitable product at ever-increasing levels of scale. Some studies have shown that even basic setups require a throughput of 10,000 tpa of feedstock to be profitable. This is the baseline of economies of scale, and a more advanced setup like Blue Whale’s will most likely require even more throughput to reach that positive margin level.

And this is where it seems the company has decided they need new leadership. I am not completely up to speed on the background of Mr. Jack Johnson, who will take over as CEO, but this is from the official PR about it:

He previously led the design, construction, and commissioning of one of the first large-scale lithium-ion battery manufacturing facilities in the United States and has founded and led multiple advanced materials companies.

That right there is what is so important, and what I like to refer to as the ability to transition from R&D to commercial scale. When you are able to bring in someone who has first-hand knowledge of the industry outside of a startup environment, part of the equation is finally filled out.

Blue Whale’s flagship facility in Bartlesville, Oklahoma, came online with an initial nameplate capacity of 14,000 tpa, with a proposed expansion to bring that to 20,000 tpa, and an ultimate long-term roadmap goal of 50,000 tpa of battery feedstock.

Their growth capital strategy is comprised of a senior secured credit facility from Breakwall Capital, combined with an equity commitment from Ara Partners and a $55 million grant from the U.S. Department of Energy with records showing they have utilized $7 million of that grant.

According to the partners involved, this combination of financing gives the company a balance sheet specifically built for expansion as the market demand for domestic battery materials keeps growing.

Producing black mass isn’t the only service they provide. Through their subsidiary, they also provide full-service battery testing, grading, and safety evaluations. On top of that, they manage one of the most often overlooked aspects of lithium-ion recycling, until it shows up on the evening news, the complicated logistics side of collections and transportation of spent batteries.

Blue Whale is moving past the R&D stage and positioning itself to be a commercial contributor to the developing U.S. circular supply chain. I look forward to seeing how they progress over the next few years.

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DISCLAIMER: This article should not be construed as an offering of investment advice, nor should any statements (by the author or by other persons and/or entities that the author has included) in this article be taken as investment advice or recommendations of any investment strategy. The information in this article is for educational purposes only. The author did not receive compensation, from any of the companies and or persons mentioned to be included in the article.

• Total Contract Value Ceiling: $300M

• Guaranteed Minimum Contract Floor: $1M

• Total Target Purchase Volume: 35,641,599 lbs (16,166.75 metric tonnes)

The government is pacing its purchases across the five-year ordering period using the following annual volume breakdown:

• Year 1 Target: 8,058,608 lbs (3,655.32 metric tonnes)

• Year 2 Target: 7,564,030 lbs (3,431.00 metric tonnes)

• Year 3 Target: 7,099,806 lbs (3,220.41 metric tonnes)

• Year 4 Target: 6,664,073 lbs (3,022.78 metric tonnes)

• Year 5 Target: 6,255,082 lbs (2,837.26 metric tonnes)

From a volume perspective, the DoD is front-loading their risk. They are buying their largest volume up front in Year 1, which equals 3.7k metric tonnes, and then they will steadily taper their annual order estimates down by exactly 6.14% each year.

The chemical specifications listed in the RFP look fairly generic, and they are most likely going for the baseline industry level for each spec:

• Purity: 99.50% minimum

• Particle Size: 4 to 8 micrometers

• Moisture Content: 0.40% maximum

• Magnetic Impurities: 0.0001% maximum

Th 99.50% specification really confirms they are targeting the absolute baseline for standard battery grade. Going with this baseline standard indicates the program is designed to secure volume for mainstream production over exacting specifications, with a OEM taking and further refining the precursor after purchase.

The contract is technically open to anyone regardless of company size so a startup could compete alongside a Major, the biggest rule is that 100% of the manufacturing, chemical refining, and quality testing has to happen within the Continental US.

However, because the Indefinite Delivery, Indefinite Quantity (IDIQ) framework relies on uncertain, spread-out delivery orders rather than a single, massive upfront purchase, it is highly likely that major tier-one mining producers will not even bother competing for such a low-value contract.

Really, there are only two operational giants in the US that could meet this demand: Rio Tinto and Albemarle, or possibly Elevra Lithium if they have a demonstration scale setup they can tap into. I could see Rio trying to monetize the lithium they can produce at their Borax mine in California before it is sold, but this kind of contract would be for the hungrier, smaller startups.

The choice of lithium carbonate over lithium hydroxide also tells us something. Hydroxide is typically preferred for high-nickel chemistries, like NMC, found in long-range passenger EVs. Lithium carbonate is the standard precursor for Lithium Iron Phosphate (LFP) batteries. For the DoD, this buy is most likely about scaling up tactical drone batteries and stationary Energy Storage Systems (ESS) for military bases.

Stationary storage and uncrewed aerial systems (UAS) prioritize thermal stability and a long cycle life, traits that LFP can provide at a lower cost and with a simpler supply chain.

As for another aspect of this RFP, after an exchange with an investor and a few more responses after that from others, there seems to be some thought this ties directly to Direct Lithium Extraction (DLE). But precursors themselves are fundamentally source agnostic. However, because this contract demands domestic delivery over the next few years, DLE projects will naturally become an indirect beneficiary.

Due to the speed of deployment after drilling and testing, DLE projects will be some of the first new domestic projects to hit what could be called true commercial-scale volume. While the few secondary sources operating right now combined could meet that initial 3.7 tonne mark, over the next few years they may be looking to buy from primary sources as well, just as those sites come online.

What could really be happening here is the DoD is just covering its bases. Over the last few years, Congress and the Administrations have been putting in steps, using both carrots and sticks, to start making the US less dependent on foreign critical minerals. For the DoD, that means they are now starting to have to come up with ways to become compliant with restrictions added to the yearly NDAA and any other ancillary act that includes restrictions on their supply chains.

As an example, this buy lines up with the domestic sourcing rules included in Sec. 842 of the FY 2026 NDAA, which prohibits the DoD from buying advanced batteries, cells, or key components that come from a Foreign Entity of Concern (FEOC). By stockpiling domestic battery-grade carbonate right now, the DoD is just making sure its contractors can actually handle these new regulations and restrictions, even if the greater commercial supply chain hits bottlenecks.

This RFP could also possibly help with the FEOC thresholds when it comes to manufacturing lithium-ion cells. The highest value-add and most geographically concentrated step in the battery supply chain is the production of Cathode Active Material (CAM). Domestic OEMs are heavily reliant on importing engineered components like CAM. While there has been some success in shifting that supply chain out of China, it is still one of the main imports for what would many of the lithium-ion producers that the DoD would be looking to work with.

By utilizing the NDS, the DoD can effectively offer low-cost, subsidized domestic lithium carbonate directly to CAM producers. This domestic supply, which the DoD is procuring through a maximum budget cap of $300 million, could lower input costs enough to financially motivate an OEM to establish CAM production lines domestically. Furthermore, by onshoring this chemical processing step to the U.S., these companies can unlock domestic production tax credits, such as the 45X.

This exact scenario creates the perfect use case for the NDS. It is designed to step in, address, and fix acute supply chain shortfalls during a national emergency, an emergency that President Trump’s national energy emergency executive order laid out.

Another important distinction has to be brought up here: the NDS cannot be used as a speculative hedge or a liquidity resource for the broader commercial market in the way the Strategic Petroleum Reserve (SPR) has been. It is a strict defense-use asset. For greater market impact, we would need to look outside the military, where there are a couple of actual proposed government programs trying to do something similar for the regular commercial market.

First, there is Project Vault. It is basically a public-private partnership backed by a the EXIM Bank. The whole idea is to build a physical stockpile of critical minerals for regular companies, like automakers and tech firms, so they have a backup if there is a sudden supply shock or a cutoff from foreign sources.

Then you have the SECURE Minerals Act, which is a bipartisan bill to set up a Strategic Resilience Reserve. This one acts more like the Federal Reserve for minerals, trying to keep prices stable so domestic producers are better insulated when foreign competitors try to manipulate the market or dump cheap material.

If these newer programs are structured under a formal government corporation charter, they will be positioned to provide the type of macro support the mining industry desperately needs. Unlike the DLA’s framework, which is restricted to physical defense procurement for a specific military stockpile, a chartered corporation could offer credit lines and creative financing directly to market intermediaries.

These intermediaries can then broker contracts with mining projects, including financial derivatives like put options on long term futures contracts that create company specific price floors.

If you found this article valuable, consider becoming a subscriber. The Critical Materials Bulletin is supported by readers, and for $5 a month or $55 a year you can help fund research that produces clear, no nonsense reporting that informs and advances the discussion on critical materials and battery metals.

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DISCLAIMER: This article should not be construed as an offering of investment advice, nor should any statements (by the author or by other persons and/or entities that the author has included) in this article be taken as investment advice or recommendations of any investment strategy. The information in this article is for educational purposes only. The author did not receive compensation, from any of the companies and or persons mentioned to be included in the article.

As described in greater detail in the Credit Bid Motion, that review, together with a subsequent audit, identified substantial concerns regarding certain charges billed in connection with the project, including charges attributed to RMF Nooter, LLC. Among other things, the audit indicated that RMF Nooter overbilled the Debtors by at least $16 million, including nearly $6 million in excess or duplicative labor costs.

The review also identified substantial excessive or duplicative equipment and tool charges, questionable crane-related costs, large tool purchases and transfers that were not properly credited to the Apex 1 project, and other wasteful or unnecessary expenses. ~ Document 208

The actual trigger for the halt at Kentucky was a stop-work notice. TKJV claimed Ascend let more than $41.5 million in approved invoices go delinquent, issued a seven-day stop-work notice in late October 2024, then Ascend suspended all work on November 1.

A former RMF Nooter employee described the Project’s site culture as one in which there was a “barrel full of money”. that people were intent on spending.

The numbers back that up:

• Seven days where billed work exceeded twenty hours

• 2,377.5 double-time hours

• 251 holiday hours

• 218.28 Sunday hours.

TKJV earned a flat 5% fee on total project costs, so every dollar RMF Nooter claimed on an invoice was a dollar TKJV got paid to wave through.

An example of Ascend's claims of wrongdoing by RMF Nooter and TKJV.

Ascend asked RMF Nooter in June 2024 to survey equipment for a piping misalignment issue on the mechanical vapor recompression (MVR) system. An MVR takes the waste heat and vapor from processes and, by using a compressor, increases the pressure and heat so it can be used in later stages. This MVR survey was due in eight days. RMF Nooter missed it, asked for a month long extension, then missed that too.

By August Ascend had to escalate straight to TKJV because a vendor rep was sitting on site waiting on data that was now nearly eight weeks late. Then, less than a month after that RMF Nooter's own superintendent on the MVR claimed he had no idea what was going on with the system.

Ascend's construction manager's read on it: the guy "was looking for reasons to not do any work."

At one point they had crews spending hours wondering around the site looking for missing equipment. At least ninety-six non-compliance reports were issued during construction, and Ascend believes the actual volume of defective work is much higher.

When Ascend finally pulled the plug on the project, they also accused TKJV of not properly winding the site down. Water in electrical cabinets, leaking roofs, exposed cable reels, and roughly eighty pieces of rented equipment that never got returned. This would explain why during my Q&A with Ascend they mentioned that the site had now been properly winterized.

The $16 million in alleged overbilling is separate from what it will actually cost to fix what's wrong with the facility itself.

The Credit Bid Motion puts the cost of redoing the defective and nonconforming work at "an estimated cost in the tens of millions of dollars," and says the facility "cannot be utilized in its current state" until that's done.

So even setting the billing dispute aside entirely, there’s a second, larger bill just to make the site functional on top of finishing the facility, which court filings list at 60% complete with $544 million invested, including the DOE grant.

RMF Nooter filed a roughly $40 million mechanic's lien over the unpaid bills.

They also objected to the restructuring firm Ascend brought in, Alvarez & Marsal (A&M), arguing the $1.5 million completion fee A&M stood to collect regardless of sale price or creditor recovery would eat into distributions for everyone, RMF Nooter included.

RMF Nooter also flagged that A&M has client relationships with Doral Energy and Fifth Wall, both of which are noteholders, equity holders, and contributors to the stalking horse bidder, the same parties A&M's CRO is supposed to be holding at arm's length.

Throughout the bankruptcy proceedings, RMF Nooter objected to any motion by Ascend that would involve allocating capital to anything other than the creditors. During a hearing on the DIP financing, Ascend's lawyer insinuated that RMF Nooter would prefer to sell off the company's option (referred to as an obligation by Jefferies' representative) to purchase land in Poland, which was essential to fulfill the contractual agreements with the Polish government regarding the grants they would provide.

Instead of allowing Ascend to continue operating in Poland, RMF Nooter wanted to use the proceeds from that kind of sale to reimburse creditors.

On the DOE side

Ascend isn't disputing what happened. Inflated labor hours, excessive tool purchases, equipment rentals nobody needed, all billed through for reimbursement. What it's not conceding is liability under the False Claims Act.

The settlement says flat out that it's neither an admission by Ascend nor a concession by the government that its claims weren't well founded. Nobody's declaring a winner here.

DOE paid out $5.3 million on the inflated claims between September 2023 and February 2025. The audit was initiated after a former subcontractor employee voluntarily disclosed information to Ascend.

There is no dates listed in the filings for when the audit was conducted, but Ascend disclosed the problem to DOJ and DOE in February 2025, then roughly one month later the company replaced Michael O’Kronley as CEO with Linh Austin.

Total settlement: $7.5 million.

Of that, $5.3 million is restitution, same number DOE paid out. The rest is the penalty stacked on top. In exchange DOE drops claims under the False Claims Act, the Program Fraud Civil Remedies Act, and the Contract Disputes Act, plus the usual common law grab bag: breach of contract, payment by mistake, unjust enrichment, and fraud.

This only covers Ascend as a company. Individual liability is carved out and preserved, so nobody employed now or in the past gets a free pass on this conduct just because the corporate entity settled.

If the settlement falls through or gets unwound later, the government's claim reverts to the full $16 million, the original exposure number, plus penalties. So Ascend settled for under half of worst case, before counting what years of FCA litigation would have cost in legal fees alone.

The funds to pay off the DOE are a setoff against the closeout audit of the same DOE grant that funded Apex 1, so no cash payment from Ascend is required. It just zeroes out the contract and lets them close the grant. This, however, doesn't dismiss the DOE's reversionary claims on the equipment that was purchased and installed using grant money.

There are still some fiddleybits and assets left in the bankruptcy, with the main one being Apex 0, the Black Mass processing facility in Georgia. So far, the only real information related to that is the $5 million credit bid proposed by the Junior Note Holders, a filing by the landlord of the Covington location for close to $900k in damages to the property, and a company that is leasing out a parking lot and tractor trailers for storage who is owed for unpaid bills as well.

If you found this article valuable, consider becoming a subscriber. The Critical Materials Bulletin is supported by readers, and for $5 a month or $55 a year you can help fund research that produces clear, no nonsense reporting that informs and advances the discussion on critical materials and battery metals.

Subscribe now

DISCLAIMER: This article should not be construed as an offering of investment advice, nor should any statements (by the author or by other persons and/or entities that the author has included) in this article be taken as investment advice or recommendations of any investment strategy. The information in this article is for educational purposes only. The author did not receive compensation, from any of the companies and or persons mentioned to be included in the article.

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The Ascend Elements bankruptcy looks to be nearing its end, and with the 600 pages of documents I have been able to find, I have confirmation of what I have been calling the Bonehead Maneuver and that it was at the core of the company’s failure. But the solution may be what allows the company that emerges to continue and help develop a Western lithium-ion supply chain.

The latest news, of course, is that EV adoption is rising due to the conflict in Iran, with articles showing how fossil fuels are inadvertently accelerating the transition. But this is not new, and oddly enough the initial research was also started due to a conflict in the Middle East. Engineers years ago were looking for ways to utilize what had been thought of as waste from oil and gas production, to support an EV industry that had not been a thing since the early 1900s.

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The report leads with a power figure to describe a storage milestone. It compares growth rates to solar and wind in a way that implies similar maturity, while giving less attention to what those figures mean and how storage is actually deployed and used and how that translates into global lithium demand.

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